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What affects insurance premium

Why are some policies so much cheaper than others?

Posted on 10. February, 2014

Think of packaging, marketing and the media and you have only part of your answer.

However, before you just assume it's because one policy offers more cover than another, think for a moment about how you came to find out about that product in the first place.

      • Did you read about it?
      • Did you see it on TV
      • Did a friend tell you about it?
      • Did you google and find it?


No surprises then that 3 of the above 4 will all have required a concerted amount of marketing activity which costs money, money that is added onto the premium you pay to buy an insurance, and is absorbed in the commission that the provider receives from the insurance company. More marketing activity requires greater commission, meaning the insurance product is possibly more expensive.
 
      • Why only possibly?

Because the insurance may be inferior and offer low sums insured than a comparable and more expensive product, hence the cost of the insurance without the marketing would have been very cheap indeed.

      • How can you compare?
  Look at the section in the Policy Document called a Table of Benefits, does this look comprehensive? Are the sums insured realistic to your needs?
 
Dont be fooled - you pay for what you get.
It pays to check the small print!

      • Did you know?
      1. Over 40% of our business is recommendation?
      2. Close on 60% of our business comes to us from brokers, who recommend our products to their clients and arrange the insurance we provide for their clients themselves through us.
      3. The remaining few % does come through advertising and marketing, where we support organisations who actually do something to help you.