11th March 2016 11:14:04
What Is The Best Way To Purchase Private Medical Insurance (PMI)?
If you are looking to buy PMI, there are four mains ways you can choose:
1) Through a financial adviser (IFA)
2) With an insurer directly
3) Through a broker
4) Through an intermediary
All of these methods have strengths and weaknesses; this article will lay out the positives and negatives of buying with each method.
First, buying with an IFA:
IFA – Pros
Perhaps the main benefit of going with an IFA is the personal angle. Many people have a personal relationship with their financial adviser; they know and trust them, and have received good advice from them hopefully, on things such as investments and pensions. Because of this relationship, IFA’s are likely to also know their client well, meaning they can give a tailored, personal service.
IFA – Cons
An IFA’s main weakness is that it is hard for them to have a relationship with a wide range of insurers. Because any IFA will probably have a relationship with one or two insurers through previous clients, they are not able to easily compare the market to get the best price and cover. Some IFA’s are even tied to only one insurer, meaning if you buy from them you will only be seeing a fraction of the available providers and policies.
Another weakness of an IFA is that they will usually charge each client a fee for their PMI finding service. On the other hand, there is no fee if you buy through an intermediary – their services are totally free.
Direct With an Insurer – Pros
Going direct with an insurer is a good choice for some people, as you get to engage with the insurer more personally. This angle is very important to people who believe that if you don’t personally speak to someone who you are going to be spending money with, they it is not a good purchase.
This method is perhaps more popular with older people, who may find this more traditional method of buying health insurance to be more suitable for their needs, rather than the internet-based broker or intermediary model.
Direct With An Insurer – Cons
Going direct with the insurer means you don’t get the benefit of comparing the market as with a broker or an intermediary. This lack of comparison of different providers means you may not get the best price, or type of cover, for your money.
Through a Broker – Pros
The main pro of buying PMI through a broker is that you get to select from a large range of insurers and policies, contrary to the IFA route or going direct. A broker will listen to your needs then compare against a wide range of providers and policies to get the right deal for you.
Through A Broker – Cons
The main drawback of buying PMI through a broker is that you don’t get the more personal angle (as with the IFA or direct approach).
Another con, relative to intermediaries, is that a broker will always charge you a fee on top of the premium price. An intermediary will never do that – all their comparison and PMI finding services are totally free, and quotes are completely no obligation.
Through an Intermediary – Pros
There are two main upsides to buying through an intermediary – firstly, you get to compare a wide range of insurers, which has the function of finding you the best insurance cover at the lowest cost.
The second benefit is that intermediaries charge no fee to the customer for their service, unlike a broker. An intermediary’s comparison service is always 100% free for the user.
Through an Intermediary – Cons
The main negative of buying with an intermediary is that you don’t get the face-to-face service that you might get with an IFA.
Obviously, as an intermediary, we naturally feel that ours is the best way to purchase health cover. We feel that the financial benefit of comparison is a much greater than any benefit to be gained by going with an IFA or insurer direct.
There is no comparison when intermediaries like us are compared to brokers; the fact that brokers charge for their services and we don’t makes us the standout winner.