Should I Work with an Agent or Buy Life Insurance Online?

Clifford PendellWritten by Clifford Pendell, Managing Partner and Co-founder

If the pandemic has taught us anything, it’s that we can conduct most of our daily tasks online. From work to ordering groceries, the internet gives us access to almost anything right from our couch.

While it’s possible to take care of most of your daily tasks online through some website’s bot, there are tasks, such as buying life insurance, that are better handled with a human component.

So, while purchasing life insurance online may seem like a breeze, there are a few things you should know about buying life insurance online instead of working with a life insurance agent or broker.

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Drawbacks of Purchasing Life Insurance Online

The convenience of purchasing life insurance online may seem like it’s more adventurous than working with a life insurance professional. You can forgo an appointment with an agent or broker and receive a quote in a matter of a minute.

This alone makes buying life insurance an attractive option. However, since life insurance policies are designed to cater to your unique needs, buying a policy online is often a dangerous endeavor.

So, before you submit your application online, here are some disadvantages of buying life insurance online.

False Sense of Optimization

Most online life insurance companies will try to show you the lowest rate possible to appeal to your thrifty side. Because many factors determine life insurance rates, including the state of your health and lifestyle, online insurers often assume you’re in perfect health and thus a low risk to insure.

Unfortunately, after you complete the final application, your rate could be significantly higher than the initial rate quote. This is where a broker's expertise is invaluable. By having access to each provider's guidelines, they'll be able to save you time and money, especially if you have any health issues. 

Lack of Customization

It’s difficult for online insurers to truly provide a truly customized policy to match your needs. Since many factors determine your coverage needs, online insurers may not offer the most suitable coverage. Many online insurers may only offer policies that would suit the average person.

Additionally, online insurers don’t have an intuitive nature that can identify the most suitable policy to match your risks. For example, some insurers may deem an applicant a smoker even if they only smoke several times per year.

If you’re classified as a smoker, you’ll likely pay a higher premium for coverage than a non-smoker would. Other insurers may allow applicants to smoke several times a year without being classified as a smoker. Thus, you can save money on your policy.

Assume Term Life Insurance is the Best Option

Some online insurers assume that term life insurance is the best option for every applicant. Unfortunately, this isn’t always true. In some cases, a permanent or whole life insurance policy is the best solution for your financial needs and long-term objectives.

This is especially the case for anyone who needs life insurance to maximize a pension, provide for their final expenses, leave an inheritance behind, or protect loved one's from estate or inheritance taxes. An experienced broker will help you evaluate your options to choose the right type of coverage.

Absence of Familiarity

Throughout your life, your life insurance needs will change. With this in mind, you’ll need to adjust your life insurance policy to match your ever-changing needs.

When the time comes to make adjustments, you most likely won’t speak with the life insurance representative you originally bought your policy from. Therefore, you’ll have to catch them up to speed to help them understand your previous and correct situation.

For those who purchase life insurance through brokers or agent, they will be familiar with your situation since you have personally worked with them in the past. This may make it easier to adjust your policy for your future needs.

Life Insurance Agent vs. an Independent Life Insurance Broker

Even though buying life insurance online is a quick solution, most of the time, it’s better to work with a life insurance professional such as an agent or an independent broker. But, what’s the difference between the two?

A life insurance agent works on behalf of one or several different insurance companies. They partner with these companies to sell their various insurance products. Typically, agents can only sell products from insurers that they partner with.

Unlike agents, life insurance brokers are not tied to a specific insurer. Thus, they can find various policies that best suit your needs. Usually, independent life insurance brokers understand the entire industry and how each insurance company underwrites its policies. Since they are very knowledgeable about the industry’s landscape, they can provide an unbiased opinion and guide you to the right policy.

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Benefits of Working with a Life Insurance Agent

There are several advantages of working with a life insurance agent. First, agents have a vast array of personal experience finding applicants the right insurance policy.

Also, since they work with a limited amount of life insurance companies and products, they are often well-versed in the products they sell. But, word of caution. Just because they understand the products they sell doesn’t mean they understand all life insurance products.

Benefits of Working with a Life Insurance Broker

Since independent brokers aren’t bound to a single insurance company or entity, they make valuable and honest guides. They can lock down on the best policy for you and your unique financial situation since they don’t prioritize a specific company. Instead, they can offer you unbiased advice based on objective observations of the market.

And, they’re willing to shop several different insurance providers so that you can have the best rate. And, best of all, they won’t leave you in the dark. Finding the right insurance can take some time, upwards of a few weeks, but an independent broker can send you updates on the process.

However, since the individual is independent, your experience may vary. You should take stock of your options and choose the broker whose approach and background fit your needs.

Buying with a Life Insurance Agent vs. Online: Which One is Right for You?

Although there are numerous ways to purchase life insurance, working with someone you trust is always the best solution. Buying the right type of life insurance is crucial to ensuring your heirs are adequately protected after your passing.

Since everyone has a unique financial, medical, and personal  situation, finding the right life insurance policy requires particular expertise. Thus, working with an experienced life insurance broker to help you evaluate all of your options is often the best way to go.

Identifying the right life insurance policy is usually overwhelming and challenging. So, having the support and guidance of a life insurance broker can help you evaluate the pros and cons of each policy to help you make the best life insurance decision that’s suitable for your set of circumstances.

The Takeaway

You shouldn’t have to struggle with the life insurance selection process. An expert like those at JRC Insurance Group can help you along your way.

At JRC Insurance Group, every agent is an expert with at least 10 years of experience. We are appointed by dozens of top-rated life insurance companies, and our agents are not pushy salespeople.

Our agents don’t have quotas, either, so you’re not just a number. We have helped hundreds of clients, and we can help you too. Our passion is finding our clients affordable life insurance coverage to protect their families.

Call us today at 955-247-9555 to speak with a licensed agent, or use our online life insurance calculator below to quickly compare your options. There is no cost to apply for life insurance and our shopping services are always free.

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Clifford Pendell

Clifford Pendell

Managing Partner and Co-founder

Cliff is a licensed life insurance agent and one of the owners of JRC Insurance Group. He has helped thousands of families of businesses with their life insurance needs since 2012 and specializes with applicants who are less than perfect health. In his spare time he enjoys spending time with family, traveling, and the great outdoors.

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