Learn About What difference does the sales channel make?
What difference does the sales channel make?
What difference does the sales channel make?
Direct vs. Super vs. Retail
There are three main ways to buy life insurance:
- Direct - where you buy directly from the insurer either online or by phone
- Super - where your super fund has an insurance offering built in
- Retail - where you have the support of a third party to place your insurance, usually a financial adviser or insurance broker
| Direct | Super | Retail | |
|---|---|---|---|
| How to Buy | Online or over the phone | Through your Super fund | Via a Financial Adviser or Broker OR through Keep Insurance Co |
| How to Pay | Out of pocket after tax | From your Super account, with reduced tax | Out of pocket, from your Super or a combination |
| Products available | Life, Income protection, Critical Illness, Sometimes Income Protection | Life, TPD, Sometimes Income Protection | Life, TPD, Income Protection, Critical Illness and other niche options. |
| When you are assessed | At point of claim. | If you request additional cover (some funds will increase without UW in some scenarios) | At the point of application. |
| Costs | Most expensive. | Less expensive but rates vary widely and it's worth checking. | Middle - usually ~40% below direct but depends on a range of factors. As at Jan '26 |
| Pros | Easy to access and apply. Products are simple to understand. | Automatically applies with some triggers. Low/no underwriting requirements. Attracts beneficial tax treatment so premiums can be lower. Set and forget - you don't have to remember to pay it. | Extensive options and additional benefits. Flexible ability to structure to manage premium costs. Confidence in cover due to upfront underwriting. Can attract super tax treatment - depending on your policy structure. |
| Cons | Products are simple. Generally, the most expensive option. Underwriting at point of claim may mean you have less cover than you expected - the key here is peace of mind at claim time! Do you want to go through underwriting when you have suffered a critical illness, are severely injured or have a serious illness? | Cover can be extremely limited, default is often less than $200k, so may not cover your debts in the event of a claim. Underwriting at point of claim may mean you have less cover than you expected. Claims are subject to the Fund conditions of release so even if the insurance co pays the claim you still need to satisfy the Fund Trustee. If your account is inactive for a period of time the Super fund may end your cover to ensure your super balance is not depleted. If you move your Super you may lose your insurance. It can deplete your super balance, impacting your retirement planning | Can be hard to access without an adviser - EXCEPT through Keep Insurance Co. Underwriting and application process can be long. Products can seem complex and hard to understand the extent of the cover. |
Direct - you pay 'out of pocket' from your after-tax earnings.
Super - your premium is taken directly from your super account (so before-tax generally).
Retail - you can choose how to pay as these policies offer both. In addition, many insurers offer a hybrid option, so you partially pay from Super but have the benefits of a non-super policy (we'll get to that!)
Direct - normal product offers include Life, Funeral, Income Protection, Critical Illness. They are usually fairly basic.
Super - depending on your Super fund you could be covered for Life, Total and Permanent Disability and, in some case, Income protection. Critical Illness cover is not available under Super.
Retail - Life, TPD, Income Protection, Critical Illness. Some insurers also offer child cover, needlestick and other more niche options. Retail policies generally have a range of additional benefits beyond just the headline sum insured and its worth checking what each insurer is offering.
Direct - as these products are self-serve with fewer additional benefits you may expect them to be the cheapest option, however, in analysis done by Canstar they can be up to 30% more expensive for the same level of cover under a retail policy. See our table below for a comparison.
Super - cover under super is very cost effective, partially as it's benefits from the Super tax treatment, but also because the major funds have a fantastic bargaining position with insurers and a large customer pool. It's often worth checking if your default premium might be reduced due to your occupation, with low manual jobs generally attracting better rates.
Retail - retail sits between these two on premium, but there are a number of ways to structure your policy to get best bang for buck. Including:
- paying fully, or partially from your super,
- linking your covers so you are covered for your big-ticket debts only once,
- Choosing a Variable Age-Stepped or Variable premium option.
See our learn area for more details on how these, among other options, might help you manage costs.
| Age Range | Female Non-Smoker | Female Smoker | Male Non-Smoker | Male Smoker | |
|---|---|---|---|---|---|
| 20's | Direct | $28 | $52 | $44 | $78 |
| Retail | $19 | $35 | $26 | $46 | |
| 30's | Direct | $29 | $56 | $39 | $79 |
| Retail | $17 | $34 | $20 | $45 | |
| 40's | Direct | $43 | $98 | $55 | $135 |
| Retail | $24 | $56 | $28 | $79 | |
| Early 50's | Direct | $101 | $229 | $138 | $318 |
| Retail | $52 | $113 | $67 | $176 | |
| Late 50's | Direct | $192 | $385 | $270 | $559 |
| Retail | $103 | $205 | $142 | $322 | |