Tower Australia Group has bought direct life provider InsuranceLine Holdings for $136 million, three years after buying an initial 15% stake in the company.

The deal is intended to cash in on growing demand for direct life insurance products within a market that is projected to treble to $19 billion by 2017.

The $136 million consideration for InsuranceLine includes $61 million in cash, $37.5 million in scrip and $37.5 million in equity-linked convertible notes.

Tower claims current financial market turmoil gave both parties the opportunity to agree mutually acceptable terms, having already integrated many business activities since Tower bought its initial stake three years ago.

InsuranceLine administers life insurance policies for Tower, which is the policy underwriter.

Tower claims direct market capability is increasingly important due to the high cost of financial advice and demographic trends concerning internet and phone sales.

The company claims wholesale clients are also interested in direct sales and service capability.

InsuranceLine relies on television advertising to shift mainly low-value policies.

The company has annual income of $47 million and will be held outside of Tower’s existing life company Tower Australia Limited.