Pitfalls of Online Life Insurance Quotes
Posted by Lenny Robbins on Tue, Feb 21, 2012 @ 03:43 AM
When considering online life insurance quotes, think of the car-buying process. When you’re in the market for an auto, you’re likely to do an Internet search to research the models, the features, and the prices. But then you’ll go look at the cars that interest you, because everyone knows it’s reckless to buy a car sight-unseen.
It’s the same with buying life insurance. Unless you “kick the tires” with an experienced independent agent, you probably won’t have all the information you need to make the best buying decision. Although you can find your car and go back and forth between two dealerships to see who will give you the best price, this strategy doesn't work for life insurance as the pricing is fixed based on rating, age, amount and policy.
How You Can Go Wrong Buying Online
Choosing the wrong type and amount of insurance
Sites with online life insurance quotes have a business model built upon convenience, speed, and volume. Either they are selling your "lead" to agents or they send you to their call center to close the deal. Their goal is to close policies fast, not to work with consumers to ensure they’re satisfied. Of course, it’s nice to save time, but in a decision that has such critical long-term financial and security consequences for your family, the time you save could cost you tremendously.
An independent agent’s business model is customer service, ongoing relationships, and word of mouth referrals—which means taking the time to help you choose a policy you will be happy with for years to come. Your goals for insurance will help determine what is the best type of policy for you. You may think you need one type, when another will actually suit your needs better. This is one place where an independent agent's expertise will assist you.
Paying too much
You actually might not save as much time as you think when using online life insurance quotes—not if you don't get what you need at the best price. If your goal is to get the lowest price for the life insurance policy you need, you can’t say you’ve saved time reaching that goal if you don’t actually get the lowest price, or if you don't get the best policy.
In order to adequately research the entire marketplace, you would need to spend many hours online. An independent agent already has the knowledge you’re seeking and a database that will check many more companies than you will find in any one quote engine.
Once the agent helps you determine the right policy for your unique situation, the agent will know exactly which carrier offers the best premium rate for that type of insurance and for your age and health status (smoking, diabetic, etc.). This is another place where an independent agent will assist you- having you go to the company that is most likely to give you the best insurance rating, and consequently the best premium.
Not taking advantage of smart strategies
Related to price is taking advantage of proven life insurance strategies (e.g., pension maximization, survivorship policies). An independent agent will thoroughly explain and discuss various strategies with you to make sure you’re being as wise as possible with your money.
The Bottom Line
If you rely solely on online life insurance quotes, you’re probably throwing your money away. Work with an independent agent to make the best buy.
Photo credit: FutUndBeidl