ProtectionAug 28 2014

Direct Life sets up ‘buy now’ facility for IFAs and consumers

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Direct Life has launched a life insurance comparison service that includes the option to buy cover immediately through Aviva, with another provider expected to be added to the ‘buy now’ option in the near future.

The product enables intermediaries to compare term products from multiple providers using a brief and standardised underwriting question set.

Following completion of the questionnaire, users will be given the choice to immediately buy life cover with Aviva or to complete a full application with another provider. Direct Life confirmed that it is “expecting” to extend the buy now facility to other providers and products.

Aside from comparing terms, the product also facilitates comparing prices across providers and is available through Direct Life’s LifeQuote portal for IFAs.

The life insurer added that its initial testing indicated that advisers looking for immediate cover can complete the trans­action in less than 10 minutes.

According to Direct Life, the product was launched in re-sponse to growing frustration from IFAs and consumers about not being able to be placed on cover immediately, despite it being a normal facility when buying most other insurance-based products.

As a partner on this project, Aviva said that it was critical to reduce the “complexity” of a “critical component” such as protection, and called on the industry to take note of the importance of enabling customers to buy life insurance quick and easily.

Robert Morrison, chief underwriter at Aviva, added: “Most customers view the ability to compare products and providers, and buy now, as essential, whether they are choosing to use an aggregator, such as Confused.com, or seek advice from an intermediary.”

Provider view: Rob Quayle, managing director at Direct Life, said: “Launching a fully comparable buy now life insurance policy will allow more customers in the UK to conveniently access immediate protection cover. For too long, the industry has been criticised for its intransigence in terms of adopting practices that are now accepted as the norm by consumers who transact with other insurance-based financial services providers. Aviva must be commended for this decision as, in the fullness of time, it will help ensure that more people have adequate protection cover, whether they choose to transact through an adviser or directly.”

Adviser view: Tom Conner, a director at Drewberry Insurance in London, said: “For very simple cases, this new compare and buy now functionality will be extremely useful for clients who want to access cover quickly, without the hassle of having to complete a full underwriting questionnaire. However, with a reduced amount of underwriting, the premium for a compare and buy now offering is likely to be higher, so advisers need to be careful to explain to clients that there may be lower-priced alternatives if they are willing to provide more information. Either way, it is a great discussion point to have with clients, and any new functionality that allows policies to go on risk immediately can only be viewed as positive.”

Charges: There are no charges for using the Direct Life platform, and charges for products are the same as advertised. In the case of Aviva’s life insurance policy at the time of launch, the minimum premium is £5 a month, which must be paid by direct debit.

Verdict: Anything that helps to speed up the time it takes to get protection cover must be applauded, although the product’s success will hinge on the number of providers that sign up for its buy now facility. The industry has long been calling for a way to deliver quick answers and to enable those seeking protection to easily compare products, and this launch has finally provided some encouragement.