FAQ: Do I need an insurance adviser?

1. Do I need an insurance adviser?

If you are not familiar with the insurance product, it is better to use the services of an insurance adviser.

You have the following options:

- an adviser who earns a commission
- an adviser who earns a salary

The adviser may be tied to a specific company, or may be independent. An independent adviser can recommend products from several companies.

2. Which option is best for me?

It depends on the integrity and honesty of the adviser.

Most advisers act professionally and recommend what is best for the client. Other advisers may push the client to buy a product that allows them to earn a higher commission.

It is important that you find an adviser that is trustworthy. If you do not know the adviser personally, you should get a friend to recommend the right person to advise you.

3. How much commission does the adviser earn?

It depends on the product. Some insurance companies pay a high rate of commission to the adviser, and load the cost into the premium. It can amount to almost two years of your premium. This is too high.

Other companies operate pays lower commission and reduce the cost to the consumer. This is better for the consumer.

You can ask the adviser about the distribution cost that is built into the premium.

4. Can I buy directly from the insurance company?

Some insurance companies give you the choice to buy directly and enjoy a lower cost. They still have to pay a salary or commission to the adviser, but the cost is reduced, if you approach them directly. The adviser is more productive as he need to spend less time to sell the product.

You can ask the insurance company if they can offer you a lower premium by buying directly from them.

You may also be able to get a discount from the adviser, if you approach the adviser and help to reduce the time spent by the adviser.

5. Can I learn more about the insurance product on my own?

Many insurance companies provide information about their products on their website.

Some materials are written in a FAQ (frequently asked questions) that are educational and easy to understand.

You should read the FAQs and learn about the product. This will reduce the time needed by the adviser to explain the product. You can make a better and informed choice.