Buying insurance online vs using broker? What’s the right fit for me?

Are you looking at getting insurance?

You might be wondering … “What’s the actual difference between buying it off the internet and using an insurance adviser?”

That’s what you’re going to learn in this article.

But before we get into it … you really should know that I’m an insurance adviser here at Opes Insurance.

So, I’ve got an incentive to say: “Don’t buy insurance off the internet. Come and see me instead!”

I’m not going to do that.

Because the truth is … not everyone should use an insurance adviser. That’s right, some people are better off buying insurance off the internet.

So, in this article, I’m going to take a simple approach.

I’m going to lay out the pros and cons of buying insurance online vs using an insurance adviser. Then, I’ll take a step back and let you make the right decision for you. Because my goal isn’t to ‘sell’ you insurance, it’s to help you make the right choice for your situation.

And to be unbiased, let’s start with the good things about buying insurance off the internet.

Benefits of buying insurance off the internet

There are 4 main benefits of buying insurance off the internet.

#1 – You can get a quote from lots of different companies at once

First up, if you go to a website like LifeDirect, you’ll be able to get a quote from 5+ insurance companies, and it’s really quick.

Whereas if you work with an insurance adviser like me, I might only work with 2-3 insurance companies.

More from Opes:

• Opes Insurance vs other insurance companies (Article)
• Life insurance - Who needs it and how much does it cost (Article)
  
• What's the process for getting insurance? Step by step (Article)

#2 – You can play around with the costs

If you jump online, you’re in the driver’s seat. You can:

• Add on policies
• Increase the amount of coverage, and
• Play around with all the tools

Some people like to do this to get to grips with their insurance policy and see how it all works.

If you decide to use an insurance adviser, they can give you different quotes, but it takes more time. Because then your adviser needs to run the numbers and give them back to you.

Some Kiwis really want to play around with the numbers without waiting for someone to email them back.

#3 – You can get insured from your couch

When you buy insurance online you can get a quote and apply for insurance in a couple of minutes; it’s really quick.

If you decide to use an insurance adviser, then there is a process to go through. There is a meeting to understand what insurance you need; then we present a plan back.

And while there are benefits to that (more on this below), it does take more time.

#4 – You don’t have to talk to an insurance adviser

As an adviser … I know that some people prefer not to talk to a ‘salesperson’.

That’s because we Kiwis don’t like being ‘sold’ to; it’s part of our cultural fabric.

And we’re often worried that if we work with a broker/adviser, they might sell us something we don’t really need. If that happens, you could be wasting money.

But if you buy your insurance online, you don’t have to talk to an adviser; you can just do it yourself. That way, you are in control of what insurance you get and what you don’t.

So, there are benefits to buying your insurance online.

Benefits of using an insurance adviser

After reading the good things about getting insurance online, you might think: “That sounds great. I should just buy my insurance online.”

But there are some drawbacks too. And that’s where there are benefits to using an adviser. Let’s go through them.

#1 – An insurance adviser helps you at claim time

The whole point of getting insurance is that if something goes wrong, you can get a payout. We call it ‘claim time’.

Unfortunately, these claims often come during a stressful time. Perhaps you’re gravely unwell, or your child is. So, the last thing you want to do is look at your policy and call the insurance company.

So, the benefit of using an insurance adviser is that they handle the paperwork when it comes to claim time. That means you can focus on yourself and get through a tough time.

Whereas it’s hard to ring the internet when you’ve got a claim. So, you have to call the insurance company and sort the details yourself at claim time.

#2 – An adviser helps you figure out what insurance you need (and what you don’t)

Most Kiwis don’t know what insurance they need.

You might think, “OK, I should get some life insurance”. But how much should you take out? $500k? $1 million? More?

What about income protection insurance? Not everyone knows what it is, let alone how much cover to get. And then there are all the choices.

How long should your wait period be? What about the payment period? Do you want it to be 2 years, 5 years, or until you are 65? And if you want it for longer, is it worth the extra cost?

Your head might already be spinning. That’s why an insurance adviser will guide you through all these decisions.

Whereas if you hop on the internet, you have to figure it out yourself. And the big issue is, you might make an uninformed choice you later regret simply because it’s complex and there are so many options.

#3 – An adviser will guide you to the right insurance company

Let’s say you go online and you want $200k of trauma insurance. One company will give you it for $20 a week, another $30 a week.

So, you go with the company who will do it for $20 a week. After all, it’s cheaper.

A few years later, you unfortunately get a form of cancer and you go to claim on your insurance. But then the company tells you your cancer isn’t severe enough to trigger a payout. Believe me, I’ve seen it happen.

Insurance is complex, and the quality of the policy is all in the wording (the fine print).

Most of us don’t want to read these long documents (and most of us wouldn’t understand the technical language used). And that’s why an insurance adviser understands all the different policies. That way, they can recommend the right one for you.

#4 – Ongoing reviews to make sure you’ve still got the right insurance

Your life will change over the next 10 years. You might:

• buy an investment property
• pay off some of your mortgage
• have a kid
• or maybe your children fly the nes

A (good) adviser will review your policies every few years. That way you’ll know you’ve got the right amount of cover.

You might decrease the amount of insurance you have (or take out more).

If you pay off your mortgage, you probably don’t need as much life insurance as you used to have.

If you have a newborn child, you might need more insurance. The internet can’t know this; it doesn’t know how your life has changed.

And the risk is that you buy a policy online and then forget about it. Then, 10 years later, maybe you are under or over-insured.

So what should I do? Buy insurance off the internet, or use an insurance adviser?

Not everyone should use an insurance adviser. Some people are better off buying insurance off the internet.

If you really know your insurance, you know what type of cover you need (and how much of it). Then, buying insurance online could be the right fit for you.

Just be careful with the policy you buy, and remember you’ll be doing the work at claim time.

But, if you want guidance on:

• which insurance you really need, and
• which company to use
• along with help at claim time

Then, using an insurance adviser is likely the right fit for you.

If you’re looking for a recommendation, you might like to get in touch with me here at Opes Insurance. I can either help you get your first policies in place or review the policies you already have.