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Advisers wary on L&G direct protection service

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Advisers say a new protection comparison website run by Legal & General runs the risk of encouraging consumers to buy on price without advice.

Comparecover sells life insurance directly to consumers from insurers including Zurich, Aviva, L&G and Beagle Street.

The website gets a commission for every policy sold, which is then shared with the customer, effectively lowering the price of the product.

Quotes are non-advised, though customers can choose to get advice from Comparecover partner ActiveQuote.

Highclere Financial Services partner Alan Lakey says there is a risk consumers will buy purely based on price, not suitability.

He says: “With any specialist adviser worth his salt consumers will get a breadth of advice beyond the lowest price, however well-meaning these websites are.

“So the grave danger is they don’t get the breadth of cover they should, they don’t get all the options of things like fracture cover and non-permanent disability cover, they don’t get buyback of cover, and that’s the risk.”

Plan Money director Peter Chadborn says: “The first thing to say is advice is better than non-advised. However, for the large and increasing proportion of the population who choose not to go and get advice, it’s better they do this than do nothing.”

L&G was unavailable for comment.

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