Lifebroker provides an alternative to meeting with a personal insurance adviser when you are looking for life and other types of personal insurances.
Their online portal makes comparing policies and buying insurance policies easy, but is this the best way for you? In this article, I am going to review Lifebroker and examine the pros and cons of purchasing your insurances using their website.
There are 6 broad ways of getting insurance and in this article, I wanted to dive into Lifebroker who provide an online comparison and general advice service.
What is Lifebroker Australia?
Lifebroker is an online portal that brings together different insurance providers, so you can compare and buy insurances from them easily.
Lifebroker allows you to compare insurance policies from 5 different providers (AIA, TAL, Zurich, OnePath & MLC), as well as the cost of each individual policy from each provider.
Lifebroker is owned by the TAL Daichi-Life Group which includes TAL.
Lifebroker claim to have more than 10 years experience as an insurance comparator and they set out to:
- Easily compare leading life insurers in Australia
- Simplify life insurance and income protection
- Provide Tools and calculators to help you
- Have an application process that can be completed over the phone or online
Lifebroker have helped over 784,000 people with their insurances and looking at their reviews on Trust Pilot, it seems that they have done a really good job at this too with 99% of reviews being Good or Excellent.
What kind of insurance does Lifebroker provide?
Lifbroker offers all of the major personal insurances - Life, TPD, Trauma & Income Protection as well as Keyman insurance for those business owners who are looking for this.
In addition to this, they also have a couple of calculators that will help you to determine how much insurance you should have.
Like all calculators, they are based on a certain methodology or recipes for determining the amount of insurance you need. I had a quick play around with these and the numbers that came back are different to what I would have calculated - higher in some instances, and lower in others.
My suggestion, before settling on an amount of insurance, work through a number of calculators and get a feel for the numbers. More important than the numbers themself is the methodology. Try The Barefoot Investors method, the MoneySmart calculator and if you would like, you can also try my calculator on Facebook.
How does it work?
From the home screen on the Lifebroker site, click on the big compare now button.
The assumption here is that you know the types and amounts of coverage you are after. If that's not the case, jump back to my previous points for the options on how to calculate these amounts first.
Once you have entered some basic contact details (name, email and phone) you will be shown a range of policies which you can then sort based on price, company size and claims paid.
Listed on this page is also a breakdown of some of the important features of these policies so you can have an overview of how these work and compare.
If you are looking for a more detailed comparison, you would need to download the Product Disclosure Documents (PDS) that are also available on this quote page and dig a little deeper.
You will need to do two different comparisons if you are after the 4 types of insurance. One quote for the lump sum covers - Life, TPD & Trauma cover and another for Income Protection.
Once you have obtained the quotes and done whatever research you decide is appropriate, you can click on the select or start application button which will ask for your contact details so that a Lifebroker representative can get in touch.
These are real people and they will help you to complete the application for the cover that you have selected.
Advantages of using LifeBroker:
- Simplicity - you can work out how much cover you need, quote it with 5 different providers, do some limited research and then be contacted to apply for your selected policy
- Speed - Lifebroker provides what is known as "general advice" which essentially means they are facilitating the requests that you are making. This general advice process is much quicker than the personal advice process that financial advisers who assist you with this insurance are legally required to follow
- Flexibility - being able to apply for the cover from your laptop without having to meet with anyone will suit some people
- Choice - whilst you are still limited to 5 insurance companies, having some choice is better than simply going directly to one of the insurance companies (or straight back to your super fund).
Disadvantages of using Lifebroker:
Realistically, some of the advantages that are afforded to you by Lifebroker are the disadvantages.
The biggest thing to understand is that this is general advice and you are responsible for the decisions that you make. If you don't have the rights amount of insurance, pick the wrong product, don't get the ownership correct between super and non-super leading the cover to be inefficient from a cash flow and tax perspective is all up to you.
If you have an existing policy or cover through your existing super fund, Lifebroker is not able to compare and make recommendations as to whether it would be better to maintain these policies and will simply facilitate your request for these new policies.
If you have existing cover, Lifebroker will not do any research into these existing policies to determine whether the terms of these policies are more optimal for you - eg your existing policies may not have any exclusions yet the new policies being offered come with an exclusion for your back, or mental health etc and you accept the new offer not knowing what options are available to you.
Whilst Lifebroker can provide you with factual information, they are not able to provide you with any advice as to what would work best for you as I mentioned, they are there to facilitate your requests.
If you have any pre-existing medical conditions, being limited by the number of insurance providers (and not getting any pre-assessments done) could lead to you getting an inferior decision from the insurance companies.
Who should use Lifebroker?
If you are someone who is looking at getting Life Insurance, then it is likely that you have been through the procedure before and know how long this can take when you have to do all of the legwork yourself.
Lifebroker has provided a solution to this by allowing you to work out how much cover you should have, quote this with multiple insurance companies and apply for the cover relatively easily.
Like everything, I think Lifebroker have their place (and I actually suggest that a lot of the people I speak with trying them out) and would work as an option for you if:
- You have simple insurance needs - for me, I think this is typically before you have kids or dependants where the way the insurance requirements are calculated becomes a bit more complex
- You have done a ton of research yourself or are prepared to do this - if you have studied this and feel really confident that you understand what you are doing then the general advice model could work for you
- You don't want to pay an adviser - Lifebroker makes their money via commission paid from each of the insurance companies. You will not pay any additional fees on top of this to use this service. The premium you pay will be the same as if you go directly to the insurance company.
- You are in a rush - you can get a quote and apply for the policy quickly with Lifebroker. I have made the process for working with you as quick as I can and it can still take a month for us to research, recommend and apply for the insurances as personal advice vs general advice takes time to do properly.
- You don't have any pre-existing medical conditions - given Lifebroker use a limited number of insurers and do not do any pre-assessments, I think this is better suited to you if you don't have any major medical events in your history (even things like regular Chiro/Osteo visits, a mental health plan would be the types of things I would include as medical events)