Whilst a good life insurance policy should be an important part of your overall financial planning, there’s no need to pay more than you have to.  As long as you know what protection needs you have and don’t require any advice, a discount life insurance broker can save you as much as 40% when compared with policies offered by banks and other high street providers.

Most discount brokers only operate online minimising their overheads so they can maximise their discounts and stay competitive in a growing market. So how does a discount broker work and how do you benefit?

Like any broker or middleman, a discount life insurance broker receives a commission for selling an insurers policy. The difference is that a discount broker can sacrifice some or all of their commission when setting up your policy with an insurer to reduce the premium you pay. Some brokers will give up all of their commission and charge you a small fee whereas most will sacrifice the majority but keep say 10% or 20% rebating the remainder to discount your monthly payments. This is totally above board and common practice for most UK insurance companies with the end result being that you get an identical policy for about 20%-30%  less than if you bought direct from the insurer. The savings are even greater if compared to policies sold by banks and building societies.

One point to bear in mind though, discounted premiums are based upon standard rates so if have an extensive medical history or hazardous occupation, the insurance company could still ‘rate’ or increase your premiums. Although any increase will still include your original discount and be lower than if you had bought direct.

The only downside to buying through a discount broker is that most won’t provide you with any advice if you are unsure which policy is best for you. If you are unsure, it’s best to take professional advice from an IFA or other FSA regulated broker.

To find a discount broker simply Google (UK) ‘discount life insurance’ or ‘life insurance quotes’ to find pages of websites offering policies at discounted prices. Again, ensure they are FSA regulated by searching the FSA register.

Some popular discount brokers all directly or indirectly FSA regulated are:

Life Brokers
Life Saver
Life Search