Term Life Insurance - Anyone Buy Online?

[asphaltgambler]

Hey all, I bought a 20 yr term life policy in 2008 for the benefit of my wife. I purchased it through my insurance 'guy' who brokers a lot of different 'brands'. While I believe it was the right decision at the time, I now am thinking I'm paying too much for too little. I don't know what % actually goes to my broker each month.

The company I have is AAA rated (supposedly - information they supplied to me). I want to purchase another 20 yr policy from anyone else direct to obtain a much larger pay-off amount for less or equal to what I'm paying now. I hear many ads, mostly terrestrial radio for Term-life / Select Quote website where they are quoting more than double face amounts for less than my current monthly premium.

I'm 56, excellent health / weight / non-smoker / and on no medication.

It seems to me that eliminating the middleman and dealing direct saves everyone time and money. So is this true with Life insurance? Any people here experienced with this?

[FastCarFan]

I was an insurance agent (property & casualty) many years ago (early 1980s). While I didn't sell much life insurance, I was licensed to do so. It may have changed, but at the time the 1st year commission to the agent was most of the 1st year premium, but the % declined dramatically each year. After a few years the agent was getting very little of the life insurance premiums.

For comparison, property & casualty (auto, home, business) commissions were much lower, but they were consistent year to year - the % did not decrease.

So, if you average the commissions for life insurance over many years, they probably aren't all that much. If the commission structure is still the same, then you may not be able to save much buying direct.

I'm sure others who are more knowledgeable than I am will chime in. If I am incorrect I hope they correct me so I can learn too.

[VincentVega]

No reason to not buy online, just make sure you are dealing with a legit provider. Still a middle man, but instead of a guy on the phone its the website.

[wildthing]

I bought online recently. A lot of the online sites are also run by agents who can sell you products from many companies. Their quotes will say the name of the provider.

In the end, I just went with the one that GEICO affiliated with, Omaha Mutual. Rates are comparable.

Somebody still came to my house for the required medical exam, and I still signed some papers physically. It's not completely online like car or home insurance.

[drcoastline]

Gambler,

I am in the P&C insurance business, but am licensed in Life & Health. I specialize in commercial P&C insurance. I have a financial planner that rents office space from me and I refer all my Life/health to him. Your agent probably made 80%-90% commission the first year and is making 5%-10% per year after. Buying online doesn't save you any money, the rates are the same. Your insurance agent both P&C as well as your life/health agent should be an integral part of your financial plan. Just like your accountant, attorney to draw and revise your will and your stock broker.

As I am un aware of your financial picture and your objectives I can only speak in generalities of products.

Term life insurance is a pure insurance policy just as your automobile policy or homeowners policy. Premiums are very low as compared to other life insurance products. The policy will only pay out if the person who's life is insured dies during the term. (in your case during the 20 year policy period). If you die the day after the policy expires your beneficiary gets nothing. Most often a term policy is sold to younger people people with limited incomes in order to pay off a mortgage should the insured person pass away. A term policy does not build any equity.

At 56 years old you may want to think about one of the other types of life products. Many build equity, can be borrowed against, some have LTC coverage that can be used, pay dividends, etc. Unfortunately, you missed the 50 year old cut off age so they will be more expensive but are more of an investment and you are not just giving your money away and hoping to die during the term to collect.

Speak to a financial planner to see what products work best for you.

[aschen]

nothing personal but it seems like 99.10% of the internet and financial gurus think that whole life or insurance as an investment is a bad idea.

It seems like everytime somebody disagrees with "buy term and invest the difference" they are from the insurance industry.

[asphaltgambler]

Thanks all, I'm sure whole life has nothing for me. I've looked into it and it is very expensive for the product you get. I see life insurance no different than vehicle insurance; it's there when something happens to protect your investment in________________

I've had more than person (qualified on the subject) tell me term is the way to go, whole life - don't buy it.

So back to the original question - anyone have direct experience with online VS dude in an office? Are there really any savings?