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When you are shopping for life insurance for the first time or you are contemplating policy replacement, it is extremely important to set aside time so that you can compare rates with multiple carriers. Buying insurance can be a long process because of all of the steps that are involved.
First, you need to decide which type of policy is appropriate and then you must select a death benefit that will sufficiently provide your family with the financial means that they need after your death.
Only after you have settled on a policy type and a death benefit can you start to comparison shop.
You cannot just request a quote for a term or permanent plan from one carrier and then automatically assume that the insurer you have been communicating with offers the most competitive rates and the best policy features and offerings.
While the life insurance industry is one that is regulated by both state officials and the federal National Association of Insurance Commissioners, the carriers do have freedom to set their rates as long as the rates are justified and not predatory.
Being that life insurance rates are set by the company that provides coverage, the cost of coverage from one provider to the next can be dramatically different. Make sure to compare rates before making your decision by using the FREE tool above.
A Glimpse at the History of Life Insurance Price Shopping
In the past, comparison shopping was a very involved process that could easily become something that resembled a full-time job.
Applicants and prospective customers would have to drive an agency in their city or to a brokerage in the area to discuss their personal financial needs and then get recommendations and quotes.
If the consumer visited an exclusive agency, they were left with the rate quotes from a single company.
If the consumer visited a brokerage that had freedom to provide multiple quotes, that consumer was charged a fee once they committed to a plan and they submitted their application.
When the telephone became a popular sales channel for consumers to use, many would pick up the phone and request quotes by phone.
They could call agencies direct during business hours or speak with one of thousands of agents at a 1-800 call center anytime of the day.
While this did offer more convenience for clients without transportation or for those who did not have the time to leave the home or office, it made understanding life insurance product types and ultimately the quotes much more difficult without being able to see the charts and the price differences.
How the Internet Has Changed Shopping for Life Insurance
The Internet has changed the way that businesses operate and also the way that consumers choose a company to do business with.
With Internet access growing to 80 percent of the population, a majority of consumers who are shopping for anything from sporting goods and electronics, to auto insurance and life insurance. The online insurance sector in each line of insurance is about to surpass the traditional insurance sector.
The purchasing habits have changed since face-to-face quotes and quotes by phone were preferred.
Now, with the Internet giving consumers access to instant quotes from all of the carriers that do business in a state, most prefer to get their quotes online.
Not only does shopping for a term or cash accumulation policy online give consumers the power to find the lowest rates, it also makes it possible for that person to see a breakdown of the rates and an unbiased side-by-side comparison that they can understand.
Consumers do not have to worry about being pressured by a sales agent or persuaded to buy something that might have higher rates then the next carrier on their list when they use the world wide web.
By simply using the search engine, navigating to the appropriate website, and entering your information, a consumer will be able to learn what they need to know about rates and product characteristics.
This is why the number of people who prefer to do business face-to-face has dropped and 26 percent have said that they want to purchase life insurance via the Internet according to non-profit organization Life Happens.
How to Access Online Rate Quotes
You have more than just one option when you use the Internet as your purchasing partner to find the best term policy rates or permanent insurance premiums.
To decide which option is the best, you need to find out about the advantages and drawbacks of each option.
Here are the most popular ways that you can compare life insurance quotes online so that you can save the most money:
Direct With the Company
Life insurance companies, at least the largest writers, have spent a great deal of money to keep up with technology advances.
Even companies that have been in business for more than a century are not using the power of the Internet to keep their operational and marketing costs down while still being able to connect to modern, tech-savvy clientele.
A majority of companies have spent millions of dollars to develop consumer-friendly systems that are accessible online.These direct quote systems will display the same premium that an agent would calculate but uses terms that the average shopper can understand to make decisions and get the most accurate quote.
If you know which company you want to do business with, this is a great way to shop, but this limits your ability to price shop.
If you want to compare costs, you will have to visit each direct site individually and go through the entire quote form several times. This can be a bit time-consuming and also be confusing because you will have to familiarize yourself with different systems.
Agent Quotes Via Email
You can also request quotes with a specific agent or broker via email with their email address. This option will allow you to get personal service, but some of this is lost through the text.
You can ask specific questions, request specific types of quotes, and also get the quotes attached in the reply so that you can print them from home and do a detailed comparison.
Like using the direct quote tool, a drawback would be that you would have to send multiple emails just for apples to apples quotes with more than one life carrier.
Using Online Rate Comparison Systems
The newest option to compare life insurance quotes online is to use a third-party rate comparison system.
This is an advanced system that is not developed by a specific company in the industry. Instead, it is developed by a third-party that does business with the insurers to get permission to provide the insurers’ rate quotes. The insurer benefits from the marketing and the site is funded by insurers who are paying a small amount per quote or application.
The consumer benefits because they can fill out a single intuitive and easy to use form for several quotes from only top-rated life carriers. They do not have to send out several emails, visit several sites, or leave their home for detailed quotes that they can understand.
Instead, they enter their information and they are matched to the insurers in their zip code who extend insurance to people in their rating classification. The quotes will instantly show up and can be modified with the click of a button.
What to Keep In Mind When Choosing an Insurance Company
The Internet is full of different calculators and resourceful expert tools that will help you determine which policy type is best or how much coverage you will need.
What many consumers overlook when they are on a mission to find low premiums is that some insurers do not have the best reputations. You do not just want to compare apples-to-apples rates, you want to compare the identity of one company to the identity of the other. Here are some tips:
- Check the financial strength of the insurer to ensure the company has money to pay for claims and will stay in business.
- Check the complaint index of the insurer through the NAIC to avoid companies who are known to misquote or make claims processing difficult.
- Contact the company direct to get a feel for their customer service.
- Find out if the insurer offers several types of life insurance or other lines of insurance that you could purchase for discounts.
- Always review the terms and conditions of the policy very closely to find out if premiums are guaranteed, renewable and if riders are included.
Life insurance is a product that you are obligated to pay into for 5, 10, 20 or 30 years.
Sometimes, you are committing to pay for a policy for the rest of your life. If you want to avoid paying thousands of dollars more than you need to over the life of the policy, be sure to compare quotes.
Use online tools, such as the FREE one below, to compare several options and then choose a policy that you are happy with.