It is first worth mentioning that there is not one best insurer for everyone and every situation. From a distance, providers all look similar just dressed in different colours but as we look closer, we see they differ by far more than just colour.
With the introduction of loyalty schemes, engagement rewards and other booster benefits comparing insurers requires a lot more attention to detail. When comparing insurers, you or your expert needs to be reading the fine print. An independent financial planner should have the knowledge and tools to assist in choosing which insurer is best suited for you.
Along with the product definitions and benefits, insurers also evaluate other risk factors to determine your premium. We discussed this in our previous article – Factors That Affect Premium.
Insurers are different
Insurers also each offer varying degrees of cover from basic insurance to more comprehensive cover. The more basic products generally have far less claimable events listed in their definitions. Many comprehensive benefits also have the benefit of partial claims for minor events.
Even though most providers offer life cover, disability and critical illness cover they are not all the same. We are going to do a cover comparison of 3 insurance companies to see how their product and premiums differ.
Meet Bryan, he is an engineer in his mid 30’s. Bryan and his wife are super excited as they are expecting the arrival of their first child. Along with excitement and the changing of nappies, comes the responsibility of taking care of his family financially. Bryan asked us to help map out his financial plan and before looking at investments he wanted to start with a risk plan.
Have a look at Bryan’s premium factors before reading further.
Being an Independent Practice, we are able to compile quotes with all of the biggest risk insurance providers in South Africa. This allows us to evaluate which cover would be most suitable for Bryan’s family.
Bryan’s specific circumstances lead us to look closely at these 3 providers.
Looking at the data below, we can see that after quoting the same values and benefits with each company, there is quite a big difference between the likes of Hollard, Discovery and Momentum.
Why is Hollard so much more affordable? Well for one, Hollard offers a simple product without any of the boosters and loyalty rewards some insurers do. You are getting a ‘no frills’ product that at its core is aiming to match your needs. Hollard aims to deliver a simple straightforward product that covers your insurance needs, no more no less.
Discovery, on the other hand, offers a more integrated way of insuring yourself. They offer attractive discounts to customers that have consolidated their financial products with Discovery. Integrators and paybacks allow customers to convert and increase their benefit amounts and give them cashback on an annual basis assuming clients are willing to play ball and jump through hoops… if you are on Discovery Vitality you will know all about this.
Momentum is potentially in the middle between the two companies. Their aim is to market a direct, simple product while adding additional benefits, giving consumers a chance to integrate their policies for larger premium discounts. Over the years their incentives and value adds have become more intricate but they do keep it simpler than Discovery. Momentum is often competitive regarding premiums and they offer some of the additional value add benefits Discovery offers.
Looking at the quotes and information above, we can see that each provider is priced differently due to the various factors mentioned earlier. The lowest premium on offer is from Hollard who have chosen not add premium inflating addons and deliver exactly what is asked for. Discovery’s premium is higher because they have a slightly more until you integrate and get active. Although they are getting more complicated, Momentum does offer many of the Discovery addons but it is in many ways simpler.
The most suitable cover for you depends on numerous factors, although cost plays a big role in how we live we must also consider the other factors. Your best possible cover can easily be found by talking to your financial advisor.
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The information provided is not intended to address the specific circumstances of an individual and is for information purposes. Should you require financial advice please contact us email@example.com