You always get something out – at least, that’s what they promise and that’s how they sell it to you. I’m talking about the “out-bonuses” that direct insurers promise to pay you 5 years from now.
Based on my quote with OutsuranceLife, they “promised” to pay me 10% of the premiums paid over 5 years as long as I have not claimed on the policy. (What’s the point of the insurance if you’re not supposed to claim on it then – but that’s another post).
So let’s look at the numbers: if we assume that my premium stays constant (for the sake of the maths) then over 5 years I would have spent about R22080 on the life cover (R368*60) and I should get an “out-bonus” of about R2208.
Now if I opt for the traditional life cover (with full commission on it) then I would pay R205 pm and if I then took the difference between the 2 premiums (R368-R205 = R163) and stuck that under the mattress for 5 years I would have about R9780 at that stage. And if I went for the real no-commission option then I would have about R13080 after 5 years. Now that would be an “out-bonus”.
So at this stage, I cant see any benefit of using OutsuranceLife or 1Lifedirect…ever!
