We are all savvy internet surfers. It’s natural to go to an on-line quote engine for a life insurance quote. But smart shoppers won’t stop there because it’s a good start, but it’s not the smart way to buy. Talk to an independent life insurance agent for your best value…here’s why.
On-line quote engines are for term insurance. When buying life insurance for seniors over 70 we find more and more consumers choose a permanent (one that lasts your lifetime) policy. There are many different types of permanent policies, and you need someone to help you navigate the choices.
- Universal life insurance is a very flexible permanent policy. It can be structured to keep the face amount and the premium level for your entire life. It has little or no cash value, so that there is no cash accumulation keeping the price lower. Minimum amounts begin at $25,000 or more depending on where you live. Coverage is available up to age 90. This is usually the least expensive permanent policy, but it requires full underwriting, meaning a paramedic exam including blood and urine collection. Additionally, the insurance carrier will order your doctor records. This type of policy usually takes a minimum of 4-6 weeks to put in force. You cannot get pricing from an on-line quote engine.
- Simplified Issue Whole life insurance includes some different types of policies. These policies are a little more expensive than universal life insurance, but they are much easier to purchase and require less on your part. One thing to note is that the application questions vary slightly from one carrier to another. While one carrier may not offer you coverage, another may. This is where an independent life insurance agent is extremely helpful. Final expense insurance is available up to age 89.
# Final expense insurance is easy to get. It has simplified underwriting meaning you have to answer some medical questions. Then the company checks a prescription database and perhaps the Medical Information Bureau to confirm your answers. They may also require an interview where you answer the qualification questions on a recorded line. Face amounts range from $2,000 up to $40,000. If you can answer all of the questions satisfactorily on the application you can qualify for a level benefit; meaning coverage begins on day one of the policy. These policies can be put in force the same day as you apply or usually within a week. You cannot get pricing from an on-line quote engine.
# Final expense insurance also has a graded policy. If you cannot satisfactorily answer all of the questions, you may be eligible for graded coverage. This means your coverage will phase in over two to three years. During the graded period, you are only covered for accidental death. If you die due to medical reasons, your beneficiary will receive back all of the premium you have paid (usually with interest). After the graded period, you are covered for all reasons. You cannot get pricing from an on-line quote engine.
# Guaranteed issue life insurance is the last option. If you cannot qualify medically for any coverage, you can purchase a guaranteed issue policy. They are available from $2,000 up to $25,000. Guaranteed issue policies are available up to age 85, however, at older ages, you may only be able to purchase $10,000 of insurance. These policies have a two-year waiting period during which time your beneficiary will get all premium paid returned to them should you pass away. After the waiting period, the full face amount is paid. You cannot get pricing from an on-line quote engine.
You may have noticed that you cannot get quotes from an on-line quote engine for any of these permanent policies. This alone suggests an agent is your better option. But all agents are not created equally. Here are some things to consider.
- Choose an independent agent over a captive agent because captive agents only have one company they represent.
- Make sure you work with an independent agent who has access to many different life insurance companies.
- Choose an agent that you are comfortable with. Check their reviews. See what their clients think of them. See what information is available on their website. Make sure you feel they are knowledgeable.
Find an agent to work with and be sure you understand what you are buying. Permanent life insurance lasts your lifetime. Find the right policy to help you fulfill your goals and protect your family.
Lenny Robbins has spent his entire business career in financial services. He was a VP of Oppenheimer & Co., Inc. prior to starting his own securities broker/dealer. In 1991 he founded Life Net Insurance Solutions which specializes in life insurance for seniors and baby boomers.