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Why Do You Want to Buy Life Insurance Online?

Why Do You Want to Buy Life Insurance Online?

Unless you have studied the way that life insurance works, you will in all likelihood over pay premiums for a policy. There are a lot of moving parts to underwriting and quoting life insurance. First on the list, life insurance agent’s services are FREE. We are paid by the insurance carriers a commission. In most cases, we can find great products from A+ Rated insurance companies at a better price and value that what a consumer will find online. Why you may ask? There are several carriers that do not have huge marketing budgets because they only market through insurance brokers. Therefore, they do not have the big marketing budgets of some of the more well-known insurance companies. Those savings reflect to cheaper premiums to the consumer.

The second reason is underwriting concerns. A life insurance broker is especially helpful if there are underwriting issues a consumer might not realize is a problem. There are a lot of factors that can cause rate ups or even declines from buying life insurance. Some examples can be overweight, diabetes, high blood pressure, high cholesterol, prescription drug use, driving records and even occupations. The experienced life insurance broker can use case managers and underwriters to determine which product and insurance company to apply for at the best rate. Thus avoiding an unnecessary decline, that can haunt you for years every time you try to purchase life insurance. Your age, build, state of residence, occupation, policy type, health history and lifestyle all play a factor in determining premium.

The last reason you don’t want to buy life insurance online is rating factors. Each life insurance policy sold has 14 different levels of rates. They can range from “Best Preferred” which is for super healthy clients, to Standard rates which includes over 65% of buyers, to “Table Rating” which can increase premiums multiple times over. Most life insurance online quotes give the preferred rating knowing less than 8% of buyers qualify for that rate. When the policy is finished in underwriting, the rate comes back standard which is double the quoted rate. You just overpaid because you decided not to use a life insurance agent, which again is free.

When you look at buying life insurance online with hundreds of life insurance carriers, offering scores of plans times 14 rating classes, the odds are not in your favor of buying the best life insurance coverage at the best rate for your unique situation. Call a broker today!

“Caveat Emptor, Buyer beware”– Latin Proverb

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Tim Wilhoit is owner/principal of Your Friend 4 Life Insurance Agency in Nashville, TN. He is a family man, father of 3, grandfather of 2, entrepreneur, insurance agent, life insurance broker, employee benefit specialist, salesman, sales trainer, recruiter, public speaker, blogger, author and team leader with over 30 years of experience in sales and marketing in the insurance and beverage industries.

 

13 Responses to Why Do You Want to Buy Life Insurance Online?

  • Good read, thanks.

  • Too much we rely on technology to truly engage our needs. With money, you should always look to a human first. That would serve as an opportunity to build trust and have a source that you can connect with. With a computer, its pretty much a yes or no without any connection. Buy your product and goodbye. If you have any issues, then you can talk to the customer service center, in which they have a few people ahead of you. Finance is something that should always have a relationship and connection.

  • Thank you for such an insightful and informative article. I could not have said it any better. Getting life insurance is a decision that requires some thought and talking with somebody that is experienced is the best thing you can do.

  • Great Article

  • Not only are these good points but also the person on the phone or the other end of the website is licensed as well. You are not saving money by cutting out the agent. You are more than likely missing something important as mentioned in the article.

  • on line insurance provides u lot of information and wider choice of products of different companies operating in the market which i feel not possible to asses s otherwise.It is now a growing trend for marketing

  • Interesting article. From a financial planner perspective, here’s a couple thoughts: I completely agree life insurance is complex and why I do not offer it myself within my practice & hire out. “life insurance services are free” is a clear example of the difference of regulation. State and Fed securities regulation would NEVER get that statement through compliance. Totally misleading. 2nd, I haven’t done the research but I would think most life insurance bought on line would be term insurance. And if people bought insurance on price, people would under-insure based on their needs versus working with an agent. Thus “they would pay more” statement would only apply to other WL UVL and other more complicated products. My guess, but I would be open to see empirical evidence.
    Last, the advertised quotes from online insurance are artificially low but if the quote comes back at a higher rate for non-preferred, guess what, its a higher rate whether its online or through an agent.

  • Roderick, spoken like a true CFP. Just kidding, I know FINRA has you guys over a barrel about every word that comes out of your mouth. My personal belief it is to the determent of the client because financial planning has become so complex the average investor really doesn’t understand it. My article is really much more simple than you are analyzing it to be. Yes, the vast majority of people need term over whole or universal life. The majority of people are under insured. Your proof of empirical evidence is at LIMRA. I suggest doing a bit of reading there. I am not a planner and after 24 years in the business, never want to be a planner. I do believe after all these years, I am an expert at life insurance and I stand behind every word of my writings through LIMRA and certainly personal experience. Needing more life insurance is not a higher price but simply the best price for the proper amount of life insurance to cover the client’s unique situation.

  • Great info! Can I share this?

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