Buying Life Insurance Online vs In Person: Which Is Best?
Getting life insurance online and in person is a simple process, but a few key differences between the two will provide contrasting experiences
Investing in a life insurance policy is one of the best ways to provide a level of security for a family in the event that someone passes away prematurely. A life insurance policy can allow families pay for final expenses, like funerals, and support them as they adjust to their loss.
In today’s age, buying a life insurance policy is easier than ever. As you do your research into life insurance, you will have to decide whether you want to get a life insurance policy online or in person and what type of insurance is the best for you. In many cases, people tend to find more affordable life insurance policies when they buy online. With that being said, some people prefer the more personalized experience they get when buying in person. This guide will help you understand the process of purchasing life insurance online and in person and which type of life insurance may be best for you.
Getting a Life Insurance Policy Online
Buying life insurance online is a quick and easy process, but you may want a more personalized experience
The vastness of the internet makes so many more things accessible in someone’s day-to-day life—and that includes finding life insurance coverage. While 10 years ago working with an agent or a broker may have been the only option, now someone can go online and buy a policy relatively quickly.
The process of buying insurance online
Finding an affordable life insurance policy online is easier than ever. The best place to start is by determining how much coverage is needed and the type of policy that works best. There are many guides out there that can help you determine the amount of coverage you need, but you will want to consider the following:
- Your income
- Your debt
- Your family or any dependents you have
- Your final expenses
After you have a good idea of how much coverage and the type of policy you need, it’s time to start doing some research. Because of how many options you have available to you, you should get online quotes from a few different carriers and compare your options. You may also want to look into your existing insurance policies to see if you can bundle your policies and get a discount.
After you do your research and settle on the right company for you, you will have to fill out a more in-depth application so your insurance carrier can more accurately determine your premium. You should expect to answer a few questions about your health and other basic personal questions. Depending on the type of insurance you are applying for, you may be required to go through a medical exam. So, your next steps will be either taking that medical exam or denying it. Keep in mind, if you do deny your medical exam, you may limit the type of policies you can get.
After all of the preliminary steps are taken and you are approved for your policy, all you have to do is sign your documents, list your beneficiaries, and start paying your premium. All in all, the process of buying life insurance online is very simple.
Advantages of buying life insurance online
The process of finding life insurance online is designed to be as easy as possible, so as long as you are at least a little bit tech-savvy, you shouldn’t have too many issues. Getting life insurance online is also a pretty quick process. While working with an agent can draw out the process, you can find a quote on your own time and move forward with the application on your own time. Because you have so many options available to research, more often than not, you can find a cheaper policy online than you can with an agent.
Drawbacks of buying life insurance online
One big drawback of buying life insurance online is that it can be difficult to get in touch with an expert who can help you understand the specifics of your life insurance policy. Most carriers have customer support teams available and a plethora of online resources, so that’s not to say it’s impossible to get your questions answered. With online insurance policies, initial quotes tend to change as your insurance company examines your premium factors, so it can be tough to understand the full scope of how much you can expect to pay.
Getting a Life Insurance Policy In Person
Working with a broker or agent gives a more personalized experience, but you may end up paying more for your policy
Buying life insurance online is a very simple process, but that doesn’t mean it’s the best option for everyone. Luckily, buying a life insurance policy in person is still a very viable option for people who would prefer getting policy advice from an expert.
The process of buying life insurance in person
Buying life insurance in person looks almost identical to the process of shopping for insurance policies online. You will still want to have some type of idea of how much coverage and what type of insurance you need, submit an application, undergo or decline a medical exam, and so on. However, getting your life insurance in person means you will work with either an agent or a broker to buy your coverage. The main difference in the process here is that your agent or broker will provide you with some guidance on how much insurance you may need and what may work best for you. They will also provide some additional guidance during the application process that you would not get otherwise when applying for life insurance online.
There is a key difference between the two that you will want to keep in mind when deciding whether to buy life insurance in person or not. An agent—no matter whether an independent or captive agent—works for the insurance company and will more often than not have the insurance company’s best interest at heart. On the other hand, brokers work independently from insurance companies with no contract, so they are more likely to prioritize the buyer’s interests. Brokers can provide better options because they work with a wider variety of insurance companies.
Advantages of buying life insurance in person
Despite the many options available online, there are still insurance brokers and agents to work with—and there’s good reason for that. Especially for people who need a bit more guidance on their insurance policies, buying life insurance in person gives a more open line of communication with an expert. Because of this, people who want a more personalized policy, have complicated needs, or have many questions about their policy may prefer getting life insurance in person.
Drawbacks of buying life insurance in person
Though buying life insurance in person does give a more personalized experience, you may still run into some frustrations here. Whereas getting a policy online is a fairly quick process where you control the pace, working with an agent or broker means that you are now working on their time. Because of this, getting a policy in person can be a much longer process.
Especially when working with an agent, you must be wary of your agent’s intentions. The agent controls the policy and process, so you may not have as much say in your policy as you would when buying online. Many agents make commissions, too, so you may end up with a more expansive and expensive policy than you truly need.
The Bottom Line: Which Is Best?
The route you choose depends on your personal preferences and needs
When you take the step to buy a life insurance policy, the process looks pretty similar. So, the best option for you depends on the type of experience you want and the level of help you need. Buying life insurance online may be the best option for you if you have a solid understanding of the coverage and type of insurance you need. On top of that, you can generally find better prices online than you may get when working in person. Buying insurance in person may be your best bet if you have a more complex situation or need more assistance to figure out what you need.
What Type of Life Insurance Is Best For Me?
Breaking down common types of life insurance types
Now that you have a better idea of how buying life insurance works both in person and online, you need to determine what type of life insurance you need before you start getting quotes. There are many different types of insurance, and which works best for you depends on many different factors, like your age and your health. To help you understand what life insurance may work best for you, here’s a rundown of the most common insurance types.
Term life insurance
Term life insurance is a type of policy that provides coverage for a specified period of time. Premiums and coverage amounts are determined by insurance carriers based on factors like age, health, and family health history to name a few. Oftentimes, a medical exam is required so that insurance carriers can better gauge your current health and that impact on your life expectancy. Coverage from a term life insurance policy can last 10, 15, 20, or 30 years. If a policyholder dies within that predetermined timeframe, the listed beneficiary would be paid out the coverage amount. The payout is guaranteed to be the whole amount of the coverage, and more often than not, the payout is non-taxable.
Term life insurance policies tend to be the cheapest option among all the types of life insurance available—especially for someone young and in good health. The main reason that term life insurance tends to be cheaper is that the death benefit is the main and only value, whereas a whole life insurance policy has a few more benefits for the investment. Another reason that term life insurance policies are a bit cheaper is that a lot of times, the policy expires before paying a death benefit. Keep in mind, though, as term life insurance policies reach expiration, policies can be renewed or even converted to permanent policies.
Whole life insurance
Much like the name suggests whole life insurance covers a policyholder for their entire life. On top of the coverage length, whole life insurance policies also carry a cash value that acts as a living benefit. As a whole life insurance policy ages, it accrues interest that can later be used to borrow money. Should the policyholder die with unpaid policy loans, that balance will be taken out of the death benefit, so policyholders should take special consideration to determine whether or not this is the right option for them. With benefits covering an entire lifespan and added value from the living benefit, a whole life insurance policy comes at an increased price. If a whole life insurance policy is within your budget, this level of coverage may be right for you.
Guaranteed life insurance
While term and whole life insurance are typically the top two choices when finding life insurance policies, both take health into consideration—and it’s a big factor, too. While not every life insurance carrier will require a medical exam, most do. So, someone in poor health may have trouble getting approved for a term or whole life insurance policy. However, their chances of getting a guaranteed life insurance policy are a lot better. Guaranteed life insurance policies do not require a medical exam or even answering any questions about your health.
It may sound like a great option, but there are some caveats to consider. First, you have to be within a certain age range to qualify for this type of insurance. While it depends on the carrier, more often than not, you have to be between 50-80 years old. Second, there’s a long waiting period—typically between 2-3 years—for the policy to go into place. Third, the death benefit is much smaller at a higher cost because most of the people who have this type of insurance have an illness of some sort that would disqualify them from more traditional life insurance options. Guaranteed life insurance is only a good option for someone if they have trouble getting any other policy types.
Simplified life insurance
Guaranteed life insurance isn’t the only option for people who need medical insurance and cannot pass a medical exam. Simplified life insurance has a very straightforward underwriting process, so getting a simplified policy can be a lot quicker than other types of insurance policies. Quite often, simplified policyholders can get better coverage at a lower cost than a guaranteed life insurance policy, but it is still more expensive than that of a more traditional policy type. Many times, too, simplified life insurance policies may only pay the full amount to listed beneficiaries if the policyholder had the policy for at least two years before death—otherwise, the death benefit is graded. Just like guaranteed life insurance, simplified life insurance only makes sense for those who cannot pass a medical exam and can’t get a more traditional policy.
Buying a life insurance policy is a big decision, but it doesn’t have to be an overwhelming one. With a better understanding of what type of insurance is best for you and whether you want to buy a life insurance policy online or in person, you are one step closer to finding affordable life insurance coverage to protect you and your family.