Shopping for life insurance online can be both smart and frustrating. There is an overabundance of information about life insurance – some good, some not so good. One of the most frustrating aspects of shopping online is obtaining the quotes you need to properly evaluate your options. This article will help you shop wisely and avoid the frustrating pitfalls of shopping online.
Obtaining Quotes Should Be Easy, Right?
Most life insurance websites are designed to generate “leads” (you) to sell to insurance agents. When you visit a site and complete a quote request form, you hope to see instant quotes. Oftentimes, you are just providing your contact information so that your information can be sold to 3 to 5 agents. That’s a standard practice in our industry. Companies spend a lot of money to rank high in Web searches. The purpose is to get your information and sell it.
Instead of receiving quotes, you will receive a message stating that agents will be contacting you shortly.
The company selling the leads doesn’t care who buys them. Your contact information could go to any agent. Usually, agents who buy online leads are relatively new in the business. These agents are trained to be very aggressive in following up with the leads they buy. So, it’s not unusual to receive numerous calls and/or emails within the first few hours of providing your contact information.
It doesn’t stop there. You will receive many subsequent calls and emails.
Don’t Give Out Your Phone Number or Email Address
Unless you are confident that the insurance company / website is not a lead-gathering operation, then don’t provide your actual contact information. Also, if you want to see instant quotes, then make sure the website explicitly states”INSTANT” quotes.
Our Guarantee: We will never sell or give your information to anyone.
If you want us to contact you, provide your actual contact info using the quote engine on this page. If not, just type “shopping” or something to that effect when entering your name. You need to enter a phone number and email address. Again, it’s not necessary to provide actual contact info. It is completely up to you.
This anonymous shopping is what we recommend for all online insurance quotes – UNLESS you are assured that you a dealing with a trusted agent/agency who won’t sell your information.
We have talked to dozens of people who unwittingly provided their contact information, only to later regret it. The calls and emails don’t stop after the first week or so. They continue for a LONG time…and you can’t “unsubscribe”. In our business, leads are also sold as “aged” leads for a much lower cost. So, even after a few months, your contact information will be sold to many more agents hoping that you the timing is right.
Do Shop Online: It’s A Great Starting Point
Buying life insurance is considered a major purchase. Even if you are searching for a low-cost term policy in the $25 per month range, it’s a long-term commitment. With a 20-year or 30-year term policy, the cost over the term period would be $6000 or $9000, respectively.
There are plenty of excellent websites and information online; it just takes a little work to sift through the marketing fluff.
Take your time. Make sure you’re receiving the best possible quotes and advice.
Do visit non-profit sites such as lifehappens.org Learn as much as you can about your options for coverage.
Don’t Work With A Large Agency
Large insurance agencies can be great, but they are few and far between. Often times, they have a proven track record are successful. They have grown in size and employ a lot of people. The problems you may encounter are listed below.
- Many Inexperienced Agents. When you have many employees, it’s difficult to train them with numerous carriers. It’s much easier to offer 8, 10 or 12 carriers so agents can be proficient. Most large companies want to make the training process manageable. If you work with one of these large agencies, make sure you find someone who is experienced. 10 years or more is preferable.
- Limited Options. Even with an experienced, knowledgeable agent, their hands are tied. They might only offer term insurance and not a product called GUL (guaranteed universal life). This product is also known as “term for life” or “term to 100”. Even if you’re shopping for just term insurance, having other options can be good. We have run into many instances where a GUL was LESS expensive than a 20 or 30 year term. You can read more about GUL here.
- Less Likely to Work Hard for You. Sometimes, everything goes smoothly and applications are approved quickly. Other times, problems arise along the way. For example, your doctor’s office delays in sending records or there is missing information on the application. In these situations, you want an agent who will handle things proactively, quickly and effectively. Large companies tend to deal in large volume and service issues can be difficult to resolve.
- Agents receive an override or bonuses for selling large volume. Many agencies have two or three preferred companies, even though they say they are independent. If you feel steered towards a particular company, then realize the agent may have an incentive for this. It’s easier to deal with one or two carriers. Also, they might be encouraged by their supervisors to lead with a couple of carriers.
Will Your Quotes Be Accurate? Don’t Assume They Will Be
If you are in excellent health, then getting comparison quotes can be fairly easy. You just select the best possible underwriting class (with the lowest rates) available. Our quote engine, like most, shows 4 options for non-smokers and two options for smokers. The range is from best possible health to standard or “average” health.
These underwriting classes don’t include “rate-ups”. Carriers can charge additional premium (or decline you), depending on your health and lifestyle. If you have a health condition such as diabetes, arthritis or sleep apnea, it’s best to consult with an experienced, independent advisor who can help you obtain accurate quotes.
Even if you’re in great health and not overweight, you might not qualify for the best underwriting class . Life insurance carriers can bump you out of their best underwriting class if you don’t meet the certain criteria. The following guidelines are taken from Prudential for their Term Essential product.
Sample Guidelines for the Preferred Best Underwriting Class
- No death of any parents or siblings from Coronary Artery Disease, Stroke, or Cancer* prior to age 60. * Cancer limited to those with a high familial risk (e.g., breast, colon, melanoma, ovarian, pancreas, prostate, and stomach).
- No DWI, DUI or reckless driving in the past 5 years. Also, no license suspension or no more than 2 moving violations and/or accidents in the last 3 years
- Foreign travel. Travel to certain “high-risk” countries.
- No hazardous activities or avocations (e.g. automobile or motorcycle racing, sky diving, scuba diving, bungee jumping).
- Other standard criteria include cholesterol, blood pressure, build, etc.
Underwriting guidelines are fairly standard, but they vary slightly among the carriers. Some carriers have their niches or “sweet spots”. You might find that three agents say the best possible rate you will receive is Preferred or Standard, just because they work with limited carriers. Again, it’s best to work with an agent that works with over 40 carriers, not just 10 or 12.
We write more about this in an article we wrote on Zander Insurance. This is the only agency to whom Dave Ramsey refers his readers and listeners. In the article, we show you someone can save over $10,000 during the course of the level term period.
The Do’s and Don’ts of Shopping Online for Life Insurance – Conclusion.
Shopping online is smart. You can save a lot of time if you avoid the trap set by lead generation sites. It’s best to work with experienced, independent agents who will hard for you. It’s also a good idea to check the agent/agency reputation. Look for reviews and testimonials. This isn’t like shopping for a lawn service or computer. Reviews aren’t as numerous. However, look for real testimonials that show the client’s full name, not just “Terry W. from Ohio”.
We are here to help answer questions and provide quotes. We won’t push you, but simply educate you. If you are shopping, that’s fine. Do your homework and let us know if we can help.