Comparing quotes online is a logical first step in the seniors life insurance shopping process, but wise consumers won’t stop there. Online quote engines are great for getting an idea of what’s out there, but they’re not the smart way to buy. A life insurance agent is the best way to buy life insurance. For certain types of life insurance, you can't even get a quote without an agent.
Step One: What Kind of Senior Life Insurance Do I Want?
One of the first decisions you need to consider is what type of coverage you want to buy. You can get term life, whole life, or universal life, and each type has multiple choices. Let's do a quick description of these so you know what they are.
- Term Life Insurance
As the name implies, this is insurance that lasts for a specific period of time. We prefer level term insurance, where the premium and the face amount remain the same for the life of the policy. You can get insurance for one year up to 30 years (depending on your age).
- Permanent Insurance
This type of coverage will last for your lifetime and includes both whole life insurance and universal life insurance. These policies will usually be more expensive than a term policy, however, as we age, the difference between the premiums shrinks. You may find a permanent policy is not that much more expensive. (Also, permanent policies have more lenient underwriting, so you may get a better rating!)
- Universal Life Insurance
These are permanent policies that are very flexible and can be structured to have little to no cash value, a level premium and a level face amount. Set up this way, they are usually the least expensive permanent policy on the market. Minimum face amounts may be $25,000, $50,000 or $100,000. That will depend on the state you live in and the carrier you choose.
- Whole Life Insurance
The whole life insurance policies are generally final expense coverage. These policies range between $2,000 and $50,000 of insurance. They have simplified underwriting and no exam is required. They can be placed in force very quickly. For seniors who want less than $25,000 of life insurance, this is the only option.
Choice One: Let's Look for On-Line Quotes
- You will be able to find seniors life insurance quotes online for all of the types of coverage mentioned above. The question will become, how accurate are they? (And what don't you know, that you don't know? More on this later!)
- If you begin your shopping for life insurance by going online, you’ll find lots of sites urging you to buy immediately using their site. The first thing you see on their site is a form to fill out to get a quote. This is particularly true for term life.
- After supplying some basic information, perhaps including a few health questions, you’ll be given recommended buys—with the hope that you’ll choose from among those carriers and look no further.
- The website may limit the number of carriers it shows you because by limiting sales to a few carriers, they can earn higher commission levels and bonuses for the agency. Unfortunately this doesn't do you any favors.
- After going to a large insurance site and using their online quote engine, once you decide on a carrier, you click the apply button. You’ll be called by an agent working for that site, who theoretically is supposed to help you with your decision. But, in reality, this agent’s primary purpose is to convince you to buy from one of the the carriers he or she represents.
- At this point, you’re not getting genuine advice—you’re being guided to buy from that specific carrier or one of the other few carriers they represent. They are like order takers, fielding one call after another. You will not have much or perhaps any more interaction with them during the underwriting process, as all they do is take orders.
- Someone else will follow your application and (hopefully) make sure all of the requirements get to the company so that your file gets to an underwriter.
- This may work fine if you are in your 20s or 30s or maybe even your 40s and you are healthy. Once you start to have medical issues, lifestyle issues and are older, this is probably not your best option. The more "issues" you have, the more important it is for you to work with an agent.
- Most of this refers to term life insurance. If you are looking for permanent coverage, you may still find the same applies, but hopefully this is not how you will find the best coverage. (Universal life insurance has many different flexible options to choose from. Getting a quote online makes no sense because you won't know how the policy is structured. You need to speak with an agent to be sure you get the right fit.)
Choice Two: Choose an Independent Agent for a True Advisory Relationship
A successful independent life insurance agent doesn’t operate that way. Because they’ve built their business on customer satisfaction and long-term relationships you are not just another order to take. Once you’ve looked around on the Internet, when you speak to an independent life insurance agent, they can provide the following.
- Your agent has the ability to fully understand your situation, taking as much time as necessary to get the details needed to give you a more accurate quote.
- Your agent has experience which gives them insight into the range of options available to meet your insurance goals.
- Your agent has thorough knowledge of various life insurance strategies and how they relate to solving your particular needs.
- Your agent has the knowledge to help you find the carrier which will look at your application and be most likely to give you the most favorable underwriting rating. (Here's the part you don't know you don't know!) Every insurance company has slightly different underwriting guidelines. You may get approved at different levels from multiple companies. For simplified issue products, you may get approved by one carrier, but declined by another. This is an important benefit of talking with an independent agent.
- Your independent agent has a strong desire to find the best solution to ensure your satisfaction, because they want you as a client for life.
- Your independent agent is not tied to any insurance company. They have access to multiple carriers, so that the advice you’re getting isn’t skewed toward a particular few. They want to find you the best deal you can get.
- Your agent will provide timely follow up on requirements needed prior to and during the carrier underwriting your application.
- Your agent will deliver personal communication on a regular basis to keep you informed of your applications progression to underwriting
- Your agent will have options for you if the underwriting decision is not what you had hoped for. There are always more choices.
Being independent agents, we want our clients to get the best deal on life insurance that they can. Sometimes we have clients talking to another agent and the other agent gives them a lower price. Well, we all want the best pricing, but which agent is right? Probably the one you gave the most information to. It's nice to get a low quote, but is it really helpful if you can't qualify at that level? If you get rated differently, now you don't know if you have the best pricing at the new level. (Because one company is usually not the lowest cost carrier at all different ratings, you may not get the best value if you don't work with an independent agent.)
(Here's another thing you didn't know you didn't know!)This one is important...ONLY an insurance company can offer you insurance. (An agent cannot offer or guarantee any coverage, only the carrier can.) Your agent is giving you their best estimate of the rating you will receive. This is based on the information you share with your agent. But an insurance company will have much more information when they make an underwriting decision. They will have your exam(if there is one) and lab results. They will have results from a pharmacy database and the Medical Information Bureau. In fully underwritten coverage, the carrier may order your medical records. As mentioned, they will have much more information to base a decision on than your agent.
The Bottom Line
Buying online may seem more convenient, but it’s really not. You still have to complete an application and possibly take a medical exam. And in exchange for the illusion of convenience, you’ll be missing the opportunity to get legitimate expert guidance from an independent life insurance agent who has a vested interest in helping you get the best value.
As you can tell, we favor you working with an independent agent. Find someone you are comfortable with, check their reviews, and feel free to look them up on the Insurance Commissioner's site in their state of residence. We want you to be comfortable with your agent as getting seniors life insurance quotes is one of the most important steps to keeping your family secure.