Should You Buy Life Insurance Online?

How Does Buying Life Insurance Online Work?

Many life insurance companies allow you to purchase a policy online through their website. Alternatively, you can submit your information to a life insurance broker online and receive quotes from multiple insurance carriers to compare side by side.

You may have the option to use a calculator to determine how much coverage you need, and some insurers and brokers also provide resources to help you learn about the different types of life insurance that are available and how to choose the right one. However, you're generally on your own when it comes to educating yourself on potentially complex policy differences and picking a policy.

When it comes to term life insurance, complexity may not be an issue. Term life insurance is relatively inexpensive and is only in force for a set period—for example, 20 or 30 years. Since you're only buying the insurance coverage, there isn't a lot to consider. But if you're looking to apply for a permanent insurance policy like whole life, there are more factors to consider. Whole life policies have a cash value component that grows over time, and some insurance companies offer better growth rates than others. So buying this type of policy online can get more complicated.

That process of doing independent research is also necessary when you work with an insurance agent, but you're not entirely left to your own devices. When you work with an agent, you can ask them about the different options available to you, and they can help you find a policy and coverage amount that works for your situation. They can also offer specific advice that they think of throughout the process.

Pros and Cons of Buying Life Insurance Online

If you're thinking about buying a life insurance policy online, there are both benefits and drawbacks to consider.

Pros

• It's fast. When you work with an insurance agent, the process can take several weeks to complete. But if you go online, you can get approved much more quickly. If you don't want to waste any time, going online for a policy may be the better option.
  
• It's convenient. If you're busy, you don't have to worry about trying to find time to set up an appointment with an agent and go through the whole process in person. When you buy online, you don't even need to leave your couch.
• You can avoid bad actors. Many insurance agents work strictly on commission. As a result, some may steer potential clients to more expensive policies like whole life in order to increase their income, even if it's not the best option for the customer. Applying online may require that you do more research on your own, but it can help you make a more educated decision and avoid being pressured to buy the wrong policy.

Cons

• It's not as helpful if you have health issues. Life insurance can get complicated fast if you have health issues. If this applies to you, it may be better to work with an agent who better understands what your options might be and can help you find the right policy that you qualify for and that meet your needs.
  
• You're on your own. Even if you can do your own research, life insurance can still be intimidating. While some insurance agents may not work entirely in your best interest, it's possible to find a knowledgeable agent you can trust. If you'd prefer the help of a licensed professional, you can start by asking family members and friends for recommendations.
• You want a permanent life insurance policy. If you're looking to buy a whole life or universal life policy, it's generally best to work with an agent. For starters, many insurers don't allow you to buy these policies online. Even if they do, it's generally better to have an agent walk you through the process since it's more complicated than purchasing a term life insurance.

How to Buy Life Insurance Online

If you've decided that buying a life insurance policy online is right for you, here are some steps you can take to find the best option:

• Do your research. Take some time to learn about the different types of life insurance and how they work so you know which policy is best for you.
  
• Determine how much you need. Use an online life insurance calculator to get an idea of how much coverage you need. Think about what you want the policy to cover, such as income replacement, future college costs, mortgage payments, final expenses and more.
• Shop around. Every life insurance company has its own way of determining premiums, so it's a good idea to shop around and compare multiple quotes before you settle on one provider. Consider using an online broker like Insurify or Policygenius, which can make it easier to compare quotes from multiple carriers in one place. You'll typically need to provide some personal information to view quotes. Once you get the quotes, make sure you're comparing policies with the same terms.
• Pick a carrier and apply. Once you've decided which policy you want, apply directly with the insurance company. You may need to provide personal information, as well as details about your occupation, medical history, hobbies and other aspects of your life that may impact your rate. In some cases, you may also need to undergo a medical exam, which may include a blood test.
• Accept the policy and set up payments. If your application is approved, accept the policy and set up automatic payments. With some insurers, you can save if you choose to pay annually or semi-annually instead of monthly.

The most important step in this process is that you shop around and compare quotes before you apply with a particular carrier. This alone can save you a lot of money over the life of your policy.