There has been a trend over the last few years in that most consumers looking to buy life insurance, do so online. Most are “googling” the different types of coverage or they are looking for a quote. We will cover what you need to know to get the most accurate quote online.
There are 2 key facts to remember when shopping for life insurance:
- The quotes that you receive from one site are going to be the exact same as all other life insurance website quoters. You will not see different or better rates by going site to site.
- Buying directly from the life insurance carrier will not save you money. Whether it be from a website, agent, or agency the rates are all the same. Buying directly from the life insurance carrier just ensures you don’t have an agent looking out for your interests. You are essential leaving that up to the insurance carrier.
We will cover 3 important tips that will make your Life Insurance Quoting experience a success. They are:
- Pick the appropriate health classification (If your diabetic then you are not going to qualify for Preferred)
- Cheapest is not always the best route to go
- Living Benefits need to be considered
As you start to run quotes, you will soon realize that life insurance is not as expensive as you thought. Most consumers over-estimate the cost of life insurance and therefore never compare rates. Comparing rates online can ease the anxiety that comes with making a purchase like this.
Choosing the right health classification
Most life insurance carriers have 12 different health classifications. Whichever classification you qualify for is what determines your actual rate. The rates that are shown from the different life carriers are correct, what your health classification may not be. An experienced agent can help you determine which class you might qualify for. Below is a list of the health classifications:
- Preferred Plus (Perfect Health)
- Preferred (Minor health problems, family history)
- Standard Plus (Your health is above average)
- Standard (Your health is average)
- Table 1-8 (Moderate to Severe health problems)
We all believe we are healthy and will live forever, but, this is just not true. We recommend always start by running the quotes at a standard rate. This will ensure you won’t be surprised if your health classification is not as good as you might think. The standard health classification is what the majority of the population would qualify for.
Cheapest is not always the best
While finding the lowest rate is always a plus, you need to factor in these when buying life insurance:
- Conversion Options
- Company Strength
- Riders Offered (Disability, Living Benefits, Waiver of Premium)
About 95% of life insurance carries offer a conversion option on their term policies. This option simply states that during the term period that you are allowed to convert your term policy to something permanent without having to answer any health questions. For example, you are in the final year of your term and have a heart attack. You will most likely not be able to qualify for insurance again, but having the conversion option can be a life saver.
It is very important that you choose a company with strong financial ratings. Any company with an A.M. Best rating of A- or better is considered financially stable and will be able to pay claims when the time comes. You don’t want to choose a company that may not be able to pay claims just because you save a few bucks.
Most companies offer riders with their policies. The one rider we recommend all consumers take a hard look at is the living benefits rider. This rider allows you to access a portion of the death benefit early in the event that you have a major medical occurrence (heart attack, stroke, cancer, etc.). This rider is great to attach to your policy because it covers you in death and during an illness. If you have a family history of medical problems, it would be in your best interest to pay a little more for this feature.
The Best Life Insurance Carriers Quoted Online
Term Life Insurance
- American General Life Insurance-American General has been around for a long time and most everybody has heard of them. They are the sister company to AIG which makes them one of the biggest insurers in the United States. They are a fully underwritten company with great rates and many options to choose from
- Banner Life Insurance-Banner is a good company to use if you have average health. They underwriting is more lenient than other companies and they also offer an accelerated program. Under this program, if you are in good health and requesting $500K or less in insurance you could qualify without an exam being done.
No Exam Term Life
- Sagicor Life– Sagicor will give you an instant decision up to 1 million of coverage without an exam. Also, with Sagicor you are able to qualify for the preferred rating without an exam which is not the case with most non med term policies. These are not guaranteed issue. They do some underwriting so you want to make sure your health status is pretty clean before applying.
- Ethos Life– Ethos Life is a company that does all of their business over the web. There is no agent and you deal directly with Ethos. You can get an instant decision up to 1 million of coverage without an exam. Just like with Sagicor this is not a guaranteed issue policy.
Living Benefits Term
- Ameritas– Ameritas just released their living benefits term back in 2017. It really revolutionized the industry and put other companies on notice. The living benefits feature comes with 18 triggers (triggers are the health events that activate the rider). There 18 triggers are the most offered by all the insurance carriers. Also if you are looking for less than $300K of death benefit there is no medical exam.
- American National– American National has been around for a long time. They had the number 1 living benefits term until Ameritas released theirs. There term comes with 16 triggers and American National has a great history of paying the living benefit claims. They are also more liberal with there underwriting, so if you have some health issues, we recommend using American National. There is no medical exam for face amounts up to $250K
Guaranteed Universal Life
- Sagicor-Just like it’s term product, Sagicor offers a UL policy that you can qualify for up to 1 million without an exam. These type of policies don’t earn much cash value, but the premiums are guaranteed to age 120.
- American National: American National universal life policy is like no other. Not only is the premium guaranteed to age 120, but there policies come with a cash out option. At the end of the 15th, 20th, & 25th year, you are able to surrender the policy and receive 100% of premiums paid in. Of course you lose the coverage, but it’s a nice option to have. Also there is no exam with face amounts of $250K and below.
- Assurity Life: Assurity has a great simplified issue product. There rates are the best around for final expense. They have an A- with A.M. Best which will give you peace of mind that the claim will be paid. The age range to qualify is 50-80 with limits from $5K-$50K depending on your age.
- Foresters Financial: Foresters final expense is called PlanRight. The rates are low and you also get some great incentives when you purchase a policy through Foresters. Foresters is a fraternal organization, so not only do you get the life insurance, you also qualify for their member benefits (scholarships for your children/grandchildren and community events). Foresters offers a phone application with an instant decision. Check with your agent to see which states this is allowed in.
Guaranteed Issue Whole Life
- AIG– AIG has the most competitive rates for the guaranteed issue whole life market. There are no health questions at all. The application is done online and your policy is emailed to you rather than a paper copy. This is great for individuals who have major health issues and need some coverage. Face amounts range from $5K-$25K with an age range of 50-80 years old. The one draw back is that for the first 2 years these policies only cover for accidental death. After 2 years, you have full coverage.
- Gerber: Gerber is known for their child start-up plans, and most everybody has heard of them either by a TV ad or through direct mail. They also have a guaranteed issue whole life policy. Even with their rate increase in 2017 they remain competitive. There plans range from $5K-$25K with age range of 50-80 years old.
Side Note: You can stack these policies together if you are looking for more than the $25K. By stacking them you would have $50K instead of the $25K.
Insurance Carriers to stay away from
When you are shopping online it’s important to remember that you will come across lots of companies with huge advertisement campaigns. This can make it difficult to figure out which company is best for you. The first red flag that should go up is if the agent you are working with is Captive. Captive agents are only allowed to sell with their company. They won’t and can’t shop around for you. Captive insurance companies include State Farm, Nationwide, and Primeamerica to name a few. The most important question to ask is how many companies are you affiliated with. This will let you know if it’s time to find a new agent.
The second red flag should be raised if the offer “sounds to good to be true.” A lot of companies use paid spokepeople (Alex Trebek-Colonial Penn) to push there policies through commercials and radio ads. I would be willing to bet that Alex doesn’t own a Colonial Penn policy. Remember if it sounds to good to be true, then it probably is.
What happens to your information
When you enter your information into an instant life quoter, what happens to that info once you hit submit? The good thing is that your info is not stored on a server or in some database somewhere. Usually one of these 2 things happens:
- Your information can be sold to multiple parties (Not a good thing, unless you like getting swamped with phone calls and emails)
- The website you entered you information on is owned by an independent agent (like this one). If this is the case then that agent only has your information and will be the only agent contacting you (by far the best way to buy online).
A good rule to always follow when filling out an instant quote request is to look at the disclaimer at the bottom of the quoter. In this disclaimer it should let you know that a specific agent or agency will be giving you a call. If it doesn’t have this then there is good chance it is being sold to multiple agents/call centers.
The bottom line is that getting a quote online is safe and easy. Your main objective is to find someone who is knowledgable and you feel comfortable working with. You want someone who is going to be there for you after the sale.