Online Life Insurance | Money
When you think of high-tech industries, insurance probably doesn’t come to mind. But the industry flies in the face of its heavyweight image, and nowhere more than when it comes to simplifying purchasing life insurance in line.
Online life insurance sales were increasing even before COVID-19 – from 21% in 2016 to 29% in 2020, according to insurance research firm LIMRA – but the pandemic has raised its profile further. With the reduction in in-person visits to agents and the increase in online commerce, even for financial products, the insurance industry has been forced to adapt.
Life insurance has probably faced the biggest disruption, largely due to its reliance on in-person medicals. But life insurers have risen to the task with an improved online shopping process, according to Jaimie Pickles, general manager of insurance at the purchasing analysis firm. Jornaya.
“The digital experience is really good with life insurance,” says Pickles. Compared to car insurance, above all, “[t]The process is simpler and the price transparency is better.
That said, the process of buying life insurance online is still not perfect or suitable for all buyers. Here’s what to expect when purchasing life insurance online, and tips on how to get the most out of your purchases.
What to expect when buying life insurance online
Online insurance shopping continues to evolve, even as vaccinations promise to lessen the impact of the pandemic. Here’s a look at what the experience typically offers now, whether you’re shopping directly with insurance companies or using an independent broker who represents multiple insurers.
Comparative quotes upstream
Buying insurance online usually starts with filling out information about who you are and the coverage you are looking for. But when you shop for auto or home insurance online, you’ll usually be given names, or just one name, alone for the recommended choices. To see the premiums, you have to click on the websites of the insurers.
In contrast, “life insurance companies are more willing than home and auto insurance companies to provide their rates online in a price comparison landscape,” says Pickles. This makes it “much easier to shop around for life insurance and get a good range of potential prices.”
An invitation to share your medical file
In addition to asking you to submit basic identifying information to them, an insurance broker may request permission to access your medical records and, in turn, release them to one or more insurers, with your approval. Such data releases, from what is called the Medical Information Bureau (MIB), are becoming more common, in part because they can reduce or even eliminate the need for medical examinations.
Your agent or broker may use the data for their prequalification process, before submitting data to insurers. For example, Assaf Henkin, the president and chief operating officer of the online broker Sprout, explains that their approach is to “check an individual’s records to ensure that they are health and financially eligible.” If they do, he says, he works with “specific partners who have gone through a due diligence process with us to verify that they trust us when we bring them specific clients.”
In other cases, your prequalified submits data to one or more insurers, to request approval of a maximum amount of coverage and a premium quote from each. Again, this saves you the trouble of doing this and allows you to benefit from the expertise of the broker or agent by knowing which companies are most likely to give you the green light and offer you a competitive premium.
The possible need for a medical examination
The prequalification process for life insurance does not always exclude the possible need for a medical examination, especially to obtain the best rates. After a period in which almost no such review was conducted, in-person assessments have now resumed, with guarantees. For all the convenience of no-exam life insurance, its premiums are often higher than for coverage that involves undergoing a full medical examination.
Waiting for approval
The time required to complete and assess a medical exam is one reason that life insurance can be less instantaneous than other types of insurance. While the process may be easier when initiated online, the process can still take several weeks.
Here, too, there are signs of improvement. “Finalizing coverage with the carrier has never been great” in terms of timing, says Pickles. “But I think they do a better job of underwriting providing coverage,” with faster results.
Additionally, some insurers may offer a short-term term life insurance policy that provides coverage while you wait for your application to be approved, says Mark Friedlander, director of corporate communications for the Insurance Information Institute.
How to buy life insurance online
Here are step-by-step tips on how to use the Internet to purchase a life insurance policy.
Determine your life insurance needs in advance
The more you have an idea of how much insurance you need, what type and for how long, before you go online, the smoother your experience will be.
“[Potential policyholders] should really know what they want, ”says Elaine Tumicki, corporate vice president at LIMRA. “If they’ve done their research and know they want to purchase a $ 500,000 term policy, then a fully online process might work for someone like that.”
Friedlander agrees. “Do your research and don’t be afraid to contact an insurance professional or financial advisor before you begin the application process.
In the absence of such professionals, or before turning to one of them, you can of course get help online. A LIMRA 2020 survey found that a majority of life insurance customers research the internet before buying, including about a third of survey respondents said they go online to the life insurance website. a business when they were looking for an insurance brand.
You can also use online calculators available from insurance companies and personal finance websites to estimate your life insurance needs. Be aware, however, that many such tools require you to enter your email address or other contact information, which could result in follow-up communications that could become annoying, especially if you only buy occasionally. (You can always unsubscribe from emails if needed.)
Consider using an independent broker
If you are considering purchasing life insurance online, you will have two main alternatives: going to an independent insurance agent or an online broker or purchasing a policy directly from an insurance company, through its own. website or that of one of its affiliates. agents in your area. The option you choose can boil down to the width of your net.
Buying a policy directly from an insurance company can save you time if you’ve already done the legwork comparing quotes and picked a particular product, perhaps because you already have another one. insurance with the company. Discounts for bundling your life insurance with other coverages are less common than, for example, with the combination of auto and home insurance. But some companies, including the American family, offer such offers.
But going with just one company can, of course, mean you pay more than you would while shopping, and could also risk not having a policy, if the company rejects you for medical reasons, for example. . If you haven’t compared one or more quotes and aren’t sure where to start, a broker can provide you with a larger list of policies to choose from, while still allowing you to be prequalified for coverage. Independent agents and brokers are allowed to sell a range of insurance products from different companies, while some insurers can only focus on their product list.
Fill in the forms accurately
When providing personal information, do not hide any facts and make sure everything is correct. Failure to do so may result in the rejection of a claim or jeopardize future payment.
When it comes to signatures, many insurers no longer require “pen and paper” or wet signatures. E-sign, an electronic signature service, allows you to sign documents digitally without having to resort to physical hard copies. And electronic signatures are supported by The law on electronic signatures, which makes them just as legitimate and legally admissible.
Buying life insurance online or offline?
The pandemic may have accelerated online life insurance purchases, but experts believe the trend is here to stay. “The industry is well placed to support [life insurance] consumers who want to do the whole process online, ”says Friedlander.
That said, buying life insurance online isn’t for everyone, in part because not everyone is comfortable without some human help in the office to help with what may. be a complex purchase.
“One of the reasons that life insurance is traditionally sold by an agent or advisor is that people aren’t sure exactly what type of insurance they need and how to buy it,” says Tumicki. “They need to talk to someone who can help them through the process, explain the different products and assess their specific needs. Some of this can be done online. For others, it’s best to talk to someone they trust, ”she added.