Buy Term Life online? Without an Agent?

[adventure]

I'm also in the "bought a stupid whole life mistake policy, etc etc". 10k in, worth 5. I've been working to get a new term policy, etc, but I've been thinking:

Has anyone bought life insurance online?

I've noted that SoFi sells it online. I can buy nearly everything else I need online - why have someone in the middle? I understand the need for an agent if something is complicated, but for a vanilla 20 year term for $X, can this actually be done without someone in the middle? Has anyone managed to easily do this online, without having an agent? (I also prefer to avoid an agent, because I can't stand the monthly/annually calls to check in, and upsell, etc). GEICO doesn't bother me, they just provide a service, entirely online. I am all for using an expert when one is needed (e.g. my doctor, my dentist, my pastor, my mechanic, my plumber).

[VagabondMD]

I have used Michael Relvas, an advertiser on this site, for term life insurance. He is very easy to work with, and most of the interactions occur online. I guess there are insurance rules about exams and interviews and such that require at least a minimum amount of human connection.

[RogueDadMD]

My first term policy I used Selectquote -- a phone call, then they sent someone to my house to get blood, etc.  Easy-peasy.  I ended up with an insurance agent later when I got disability and we updated my term life, but term life is a commodity.  You don't need an agent, you just need to know how much you need, to check out the ratings of the companies, and shop around based on price.

[Jason Veirs]

adventure wrote:

I’m also in the “bought a stupid whole life mistake policy, etc etc”. 10k in, worth 5. I’ve been working to get a new term policy, etc, but I’ve been thinking:

Has anyone bought life insurance online?

I’ve noted that SoFi sells it online. I can buy nearly everything else I need online – why have someone in the middle? I understand the need for an agent if something is complicated, but for a vanilla 20 year term for $X, can this actually be done without someone in the middle? Has anyone managed to easily do this online, without having an agent? (I also prefer to avoid an agent, because I can’t stand the monthly/annually calls to check in, and upsell, etc). GEICO doesn’t bother me, they just provide a service, entirely online. I am all for using an expert when one is needed (e.g. my doctor, my dentist, my pastor, my mechanic, my plumber).

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Although you can purchase anything online nowadays, you will definitely want to work with a broker who represents multiple carriers, as you will end up saving quite a bit of money. The good thing is, that all of the pricing/rates are set by the individual carriers and the rate is the same, whether you use a broker or not.

Trust me, you will save a lot more money by using a broker, and all you have to do is let them know to not bother you every year post sale. We always like to stay in touch with our clients every 2-3 years in order to make sure that beneficiary and contact information is up-to-date, but if a client prefers us to not stay in touch, then we honor their request.

Lastly, many people overthink the process of applying for life insurance. In total, it will take about 15 minutes to complete the application over-the-phone, and then a medical examiner will come out to your house or place of business in order to complete the 20-30 minute medical exam. Keep in mind, that there is nothing out-of-pocket to you, other than your time investment of around 45 minutes to an hour or so, and the medical exam can be completed any day of the week, including weekends. After that, it goes off to underwriting, which usually takes 2-4 weeks and the broker should take care of the rest. There are also non-medical policies, which can be issued within the same day, but these are usually more costly.

[Scott at MD Financial Services]

All life insurance is placed via an agent, the question becomes do you use online process where it is more automated and you Will always have a new person on the phone to deal with at their 800 number or vs the agent who has years of experience that you know is working on your file. The reality is the carrier price and thus your price is exactly the same either way you go. Believe me if you worked with us and said 'please mark my file never to follow up with me', we would never contact you for solicitation purposes. However, if something went on with your policy (lapse, premium change, or feature drop) then we would contact you to confirm your intentions. It really depends on how one wants to interact so please tell your rep.

Virtually all the reps on WCI that support this site via advertising use term for sale.com as our quoting engine.  The only difference in using the term for sale directly is you end up with random agents being recommended that pay to advertise on Term for sale vs. using reps from WCI which you know we have been vetted and that we have a high concentration of working with physicians.
Let me know if we can help further.

[ITEngineer]

Scott @ MD Financial Services wrote:

All life insurance is placed via an agent, the question becomes do you use online process where it is more automated and you Will always have a new person on the phone to deal with at their 800 number or vs the agent who has years of experience that you know is working on your file.

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Let me share my experience (your mileage will vary) - Scott - Please don't take any of this personally. Just conveying a story.....(that you reminded me of)

1. Decided 5 years ago to get a large 20-year policy for me (since the original was before kids and before my wife stopped working). It was long overdue.

2. Got a broker. Broker 'advised' me on the amount needed and returned with quotes (not just term, but whole life, universal life, variable life, etc) when I made it clear I only wanted term.

3. Found much cheaper quotes online. Made the broker match (why was I doing his job?). Also discovered that my wife could now be insured for 1/2 the amount of an existing term policy on her (why didn't he mention that?) so we also cancelled her old one and got a new one for another 20 years at the same time. At that point I should have bailed or found another broker but I didn't. I'm not good at confrontation.

4. When it came to sign the papers......he got my policy amount wrong......(really?!?!?) Tangent - I also found errors in the math the two times I got mortgages....4th grade math people! 4th grade math.......

5. Eventually got all of this figured out. Broker eventually stopped selling me services which I never bought and moved to another part of the country (no idea what happened to him) so at least I don't get annual sales calls.

What I learned from all of this? No one is looking out for you but you. There was a point I would have happily paid for good financial services but why are they so hard to find? Now - It's all DIY.

TLDR; I would just buy it online. Get a large policy, round up, pay the bill yearly and then enjoy the rest of life knowing that you're covered.

[Scott at MD Financial Services]

Hey IT, no offense taken at all.  We have all had bad situations with every industry....Our real estate business built a commercial pad site and once the foundation cracked we realized the engineer forgot to put proper caisson count along with proper depth for the GC to install, it does happen.

[Jason Veirs]

ITEngineer wrote:

Scott @ MD Financial Services wrote:

All life insurance is placed via an agent, the question becomes do you use online process where it is more automated and you Will always have a new person on the phone to deal with at their 800 number or vs the agent who has years of experience that you know is working on your file.

Click to expand…

Let me share my experience (your mileage will vary) – Scott – Please don’t take any of this personally. Just conveying a story…..(that you reminded me of)

1. Decided 5 years ago to get a large 20-year policy for me (since the original was before kids and before my wife stopped working). It was long overdue.

2. Got a broker. Broker ‘advised’ me on the amount needed and returned with quotes (not just term, but whole life, universal life, variable life, etc) when I made it clear I only wanted term.

3. Found much cheaper quotes online. Made the broker match (why was I doing his job?). Also discovered that my wife could now be insured for 1/2 the amount of an existing term policy on her (why didn’t he mention that?) so we also cancelled her old one and got a new one for another 20 years at the same time. At that point I should have bailed or found another broker but I didn’t. I’m not good at confrontation.

4. When it came to sign the papers……he got my policy amount wrong……(really?!?!?) Tangent – I also found errors in the math the two times I got mortgages….4th grade math people! 4th grade math…….

5. Eventually got all of this figured out. Broker eventually stopped selling me services which I never bought and moved to another part of the country (no idea what happened to him) so at least I don’t get annual sales calls.

What I learned from all of this? No one is looking out for you but you. There was a point I would have happily paid for good financial services but why are they so hard to find? Now – It’s all DIY.

TLDR; I would just buy it online. Get a large policy, round up, pay the bill yearly and then enjoy the rest of life knowing that you’re covered.

Click to expand...

This is just too bad, and unfortunately, there are many agents out there who will always try to push permanent products, when the vast majority of people do NOT need them. In fact, there are only a few very limited circumstances where permanent products are warranted - To be honest, agents like this really make it an uphill battle for the other more experienced brokers, and leave a bad taste in consumer's mouths.

If a client is looking for term, then you show them the best term policy that they qualify for, given their health and lifestyle - It's as simple as that. You shouldn't have to do any of their legwork for them. Also, to try to push something like Whole Life onto a consumer who has already done their due diligence and is specifically requesting term insurance, is just ludicrous and upsetting.

In fact, we will actually do a Virtual Screen Share with our clients (showing www.Term4Sale.com rates), so that they can not only see all of the rates, but we also will show them the specific underwriting guidelines for each carrier, so that they can fully understand as to why we're applying with a particular carrier (based on what health class they can qualify for) - This is really helpful, as it shows full transparency.

Also, as you mentioned, there is absolutely no need to work with an agent face-to-face unless you prefer that particular method. We work with clients all over the nation, and only meet with clients on very rare occasions. In fact, I just wrote a life insurance policy a few months back for a client who lives in North Pole, AK that found me on www.Term4Sale.com. I'm also writing three other policies currently for clients who live in MT, NY and FL - This is the way the industry is heading.

Lastly, as Scott mentioned above, there unfortunately are a lot of these amateurs in every industry, which is rather unfortunate, and you really have to properly vet someone before engaging with them. If there's any silver lining, these types of agents typically do not last more than 1-2 years in the life insurance industry, before having to exit the business. Frankly, this is to the benefit of everyone.

[HopingForFIRE]

I used Bobbi Zimmerman with Financial Designs a couple years ago ([email protected]). I see nothing wrong with buying it online unless you get a break using a broker. Luckily it's not like disability insurance where there's tons of riders and a huge variability. Try a broker and compare to online quotes then pick the cheapest option that fits your needs.

[Jason Veirs]

I completely agree. Term insurance is pretty straightforward, and all of the rates are listed online, so there's full transparency which is great. I always recommend that people check out rates on a site like www.Term4Sale.com (T4S) in order to get an idea of the cost, and then contact a broker in order to get pre-qualified and go over all of the underwriting specifics, as there's always the lowest published rate, and then there's the rate that you can actually qualify for, based on your health, family history, and lifestyle. Sometimes, these are two different things and a broker should easily be able to explain to you as to exactly why he/she is recommending that you apply with a specific carrier.

Also, when working with a broker, you just want to make sure that they're familiar with each of the carrier's specific underwriting guidelines, and that they represent all of the the main players in the life insurance industry, as each carrier has different pricing and underwriting nuances, which can really end up costing you a lot of money in the long-run. There are many brokers (some even on T4S) who say that they are brokers, yet they only represent a total 3-4 carriers out of pure convenience to them, as they do not want to learn all of the other carrier's applications, and would prefer the ease in only dealing with a few carriers. This doesn't make any sense to me, but that is why it helps to shop around. If a broker doesn't give you an explanation as to why they're trying to get you to apply with a more expensive carrier, then this is usually a sign that they're trying to push you towards one of the limited carriers that they represent.

For instance, I recently had a 26yr old male client who came to me from T4S about a month ago, and was looking for a $250k 30yr term policy. He was extremely healthy, and met all of the Preferred Plus NT criterion with every carrier on the market, but due to his father passing away of a massive heart attack at age 56, most carriers would have automatically dinged him and bumped him down to the more expensive Standard Plus NT health class, based on his father passing away of Coronary Artery Disease (CAD) prior to age 60. Despite his family history being completely out of his control, this unfortunately was the reality, and we were forced to work around it. What this means, is that although Cincinnati Life was initially the least expensive carrier on T4S at the Preferred Plus NT rate ($217.50/yr), his father's history of CAD prior to age 60, would've automatically knocked him out of the top 2 health classes (Preferred Plus and Preferred NT) due to their published underwriting guidelines, and bumped him down to the Standard Plus NT health class, which was $325/yr. Because I knew this upfront, we just ended up going with Pacific Life out of the gate, as Pacific Life will still allow you to qualify for their top Preferred Plus NT health class, so long as there's no family history of death due to CAD with either parents or siblings prior to age 50, and NOT age 60 like most all other carriers on the market. Although Pacific Life's Preferred Plus NT rate of $225/yr was bit more than the absolute lowest Preferred Plus NT rate of $217.50/yr with Cincinnati Life, this was still much better than the Standard Plus NT rate of $325/yr that he actually would have been able to qualify for with Cincinnati Life. Yes, it's only $100/yr more per year, but this equates to a savings of nearly 44% per year, which really adds up.

In addition, since the rates are all priced at the carrier level and there's no way to undercut the published rates, whether you go with a broker, or purchase the policy online, the price is the same - The commission is already baked into the published rate. As mentioned above, I feel the best option would be to get an idea of the pricing on a site like T4S and then contact a broker over-the-phone, which should only take about 15-30 minutes. We work with client's all over the nation, and very rarely meet face-to-face. Locking-in a life insurance policy can easily be done in less than about an hour or so, and the entire process can be completed by phone and email.

As you can see by my example above, working with a competent broker ensures that you're getting the best possibly policy on the market. Not only do we always pre-qualify all of our clients' upfront (based on your H&W, medications, tobacco use, family history, driving record, travel, etc.), in the event that something comes back differently during the underwriting process and the policy comes back as AOTA (approved other than applied) for whatever reason, then we immediately start looking at other carriers underwriting guidelines in order to see if there are better/lower-priced options on the market. If there are better options available based on the updated data that we have (usually from the lab work), then we just have you sign a new application for that new carrier, and use your previous medical exam that you already completed, which makes it really easy. This is allows us to easily shift to another carrier, as sometimes things come back during underwriting process that you weren't aware of, and you just don't know where you will actually qualify, until you get your labs done.

Of course, if you're very young and healthy and do not have any health, family history, or lifestyle issues, then you could probably just go to T4S and pick the lowest carrier at the Preferred Plus NT health rating and apply online with them. With that being said, whether you go through a broker on T4S, or just apply through an online entity, there's still a licensed agent somewhere in the mix. The beauty is, that whether you're applying through a broker vs. just applying online, you're still paying the same price, as others have previously mentioned, while usually getting more knowledge and industry experience if going through a broker. Also, if a client requests that we do not contact them, then we obviously always honor their request, unless of course, the policy is in jeopardy of lapsing, or something of that nature. To not honor a client's request such as this is just a bad business practice and unacceptable.