Why Avoid Banks When Taking Out Life Insurance

If you have ever taken out a mortgage from a bank, chances are that they also offered you life insurance. And it seems like a good deal. After all, you will have both your life insurance and your mortgage--two important expenses you have to make--under one roof. This of course spells convenience since you will make all your payments to just one entity.

You might not know it but you are probably getting a bad deal if you take out life insurance from your bank. Here are some reasons why you should avoid your bank when taking out life insurance:

  1. You're severely limiting your choices. Getting a great deal on life insurance isn't just about convenience. You also need to factor in things such as the amount of premiums and the level of coverage you're getting. And there's a great chance that your bank doesn't provide the best deal that you deserve. What you need then is to shop around first, compare quotes, and then make a decision. If you confirm that your bank indeed has the best deal available, then that's the only time you should go ahead with the deal.
  2. Banks are notoriously unreliable. According to a report published by the Financial Ombudsman Service (FOS), banks have received the highest disputes in the insurance industry. Figures from 2011 have shown that banks were responsible for 12,210 out of the total of 25,298 complaints they received over the period.
  3. You're better off working with a broker. In the same report, the FOS showed that insurance brokers were the most reliable in the industry, with general insurance brokers only getting 123 complaints, and life insurance brokers getting 13. What's more is that insurance brokers can provide you with more choices than banks ever could. Plus, they also provide you with access to more insurers, many of which you wouldn't be able to access, much less find on your own.
Here at Rate Detective, our professional advisors will help you find the best insurance policy for your needs. They will ask you the right questions, so that they can provide you with personalised rate comparisons of Australia's top insurance companies. That's because when your future is at stake, you can't afford to settle with just a cookie-cutter solution. So make the right choice today. Contact us today for more details!

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Published on May 5-th, 2013 in Life Insurance
Damon Rasheed is the CEO of Rate Detective, an Australian financial service comparison sites specialising in Life Insurance, Income Protection Insurance and home loans. Damon holds a Master's Degree in Economics from the University of Melbourne and has been involved in many start-up internet businesses.

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