Consumers not aware of level of commissions on life assurance policies

Friday 01 February 2013 07.48
Just 43% of Irish adults have life assurance
Just 43% of Irish adults have life assurance

Just 43% of Irish adults have life assurance and the majority have little or no idea how much commission they are paying.

The online insurance intermediary lowcommission.ie has published results of a survey carried out by Amárach Research on 1,000 Irish adults.

The survey reveals much about the lack of care and attention consumers pay to crucial personal finance decisions.

The average commission paid on a life assurance policy in Ireland equates to more than an entire year's premium - 118%. 

When lowcommission.ie questioned those who have life assurance, 92% of them believed the commission they paid to brokers or banks was less than 60% of a year's premium.

The research also showed that of the people surveyed 23% had mortgage protection policies while 17% had serious illness cover and 7% had income protection.

“These research findings confirm that the vast majority of consumers who buy insurance products such as life assurance, mortgage protection, serious illness insurance and income protection have no idea how much they pay in commission to brokers, banks and direct channels,” commented Peter O’Reilly, managing director of lowcommission.ie.

“This staggering lack of appreciation amongst consumers exists despite the obligations on those charging commission to be absolutely transparent with their customers. The knock on effect is that consumers are not sufficiently well informed to make a judgement on whether they are getting value for money and have not been, to date, sufficiently motivated to shop around for best value in the market,'' he added.