Major Brokers Inflate Life Insurance Costs with High Commissions

In a revealing expose, major brokers, advice firms, and comparison sites are reportedly driving up the cost of life insurance policies by demanding inflated commissions from insurers. This practice has resulted in additional costs for customers, with many burdened with up to an extra £1,000 over their policy’s duration to cover these commission payments.

Big Players Squeeze More from Customers

An industry insider revealed to The Times that larger firms such as Quilter, the Openwork Partnership, Mortgage Advice Bureau, and comparison website Go Compare typically charge customers about 10 percent more than their smaller competitors. These large entities have negotiated exclusive deals with major insurers, leading to higher premiums for customers who purchase life insurance through them.

Justifying High Costs

These middleman firms defend their higher costs by arguing that they provide added value through advice or convenience. The justification, however, is a subject of controversy and raises questions about the fairness and transparency of life insurance pricing.

Customers Pay the Price

Particularly concerning is the impact on customers who may be unaware that they could find cheaper alternatives elsewhere. The practice of inflating life insurance costs through higher commissions shines a spotlight on the need for increased transparency and fairness in the industry.