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A Life Insurance Company is the company
that issues your insurance policy and covers your insurance
risk. Their name will appear on your insurance policy and
it is the company’s responsibility to pay out if you
make a claim. Most Life Insurance Companies offer a wide range
of insurance and investment services – for example pension,
investment funds, investment bonds, car insurance, home &
contents insurance, life assurance, and even loans. Sometimes
a Life Insurance Company will call itself
a Life Assurance Company but they mean one
and the same.
A Life Insurance Broker operates between you and the Life
Insurance Company. Their role is to find you the cheapest
and most suitable Life Insurance policy and to organise the
insurance on your behalf. If the Insurance Broker is providing
advice, they should also complete what is called a “Fact
Find”. This is a personal financial survey which helps
them decide what type of policy you need.
Fact Finds are very complicated and it is impossible to conduct
an accurate Fact Find online. ClickLife tackle this problem
by providing you with extensive information and will explain the range of options available to you so that you can decide for yourself what
you need.
All Life Insurance Brokers are regulated by the Financial
Services Authority.
A Financial Adviser is a person who is registered
by the Financial Services Authority to provide financial advice,
particularly in respect of investments. (For more information
about the Financial Services Authority visit www.fsa.gov.uk.)
Life Assurance is a hybrid policy which
combines insurance with investment. Because it contains an
element of investment, it can only be sold to you by a Financial
Adviser who is regulated by the Financial Services Authority.
Most Brokers receive commission for
selling financial products, although some may charge fees
as an alternative. This should not affect their selection
of insurance companies or the contracts offered or recommended
to you. The Financial Services Authority has said that it
prefers the concept of fees rather than commission. However,
VAT is charged on fees whereas there is no VAT on commission.
So, on a like for like basis, commission will work out cheaper.
Furthermore, on the Internet, few customers welcome paying
fees up front – commission seems to be the accepted
norm.
The following Frequently Asked Question is related to the
above topic. You may care to read it: -
Why are life insurance prices so low on
the Internet?
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