Is there a nook somewhere in the global economy where you couldn’t save money by buying direct from the provider of the product or service? As the saying goes, never say never, and it richly applies when it comes to buying life insurance. You can buy life insurance direct, but it won’t save you any money.
Worse, it may very well end up costing you money in ways that you never thought of. Some of that cost will be in the form of a lot of extra effort on your part. But some of it will also play out with higher premiums.
Here are just a few of the reasons why you don’t want to buy life insurance direct from an insurance company.
You’ll Be Limited by the Products One Company Has
Anytime you buy life insurance direct from an insurance company, you will be limited by the product selection that they have. Not every company has every program that is available on the market.
Being true to itself, the insurance company will make every effort to sell you the best life insurance policy that they have – which isn’t quite the same thing as the best life insurance policy that you need. If the policy that they sell you isn’t a good fit, you will spend the rest of your life with a policy that only sort of works.
The best way to have the most access to the greatest number of life insurance products, is to buy your policy through an independent insurance agent. Since that agent represents several different companies, he can give you the best policy on the market, rather than the best one that a single company has.
Approval: Heads You Win – Tails…You Need to Find Anther Insurance Company
There’s a built-in disadvantage to trying to buy life insurance direct from an insurance company. If your policy is approved under the terms presented to you at the outset, then all is right with the world. But if the company declines your application, or changes your coverage and/or premium rate, you will be left with only one choice: find another insurance company.
Now you have to go back to square one of the application process. That means filling out another life insurance application, writing a check for yet another application fee, and providing more supplemental information, should any be required. In addition, the clock is reset to zero, and more days and weeks will be spent waiting for an uncertain approval.
An independent life insurance agent can spare you the trouble, by shopping your profile to several insurance companies that he believes are likely to approve your policy on the terms you expect.
No Chance to Get a Better Premium Rate
Once your direct life insurance application is approved, you will be given the premium rate. That isn’t something that you will be able to negotiate – it’s the rate that the insurance company has on that particular insurance plan, based on your specific circumstances.
You might take that approval and begin shopping for a better deal with another insurance company. But the problem is that life insurance approvals typically expire after 30 days. That will give you time to test your application at perhaps just one more life insurance company, before you risk going back to the very beginning with the first one.
An independent life insurance agent already has the general premium rates for the companies that he works with. He can most likely get you the company with the best rate before even making a formal application.
No Support in the Application Process
Applying for insurance of just about any type, is a trek into the deep unknown. Insurance is just more complicated than the average person can comprehend. If you make direct application to an insurance company, there’ll be no one there shepherding you through the application process. Though you’ll likely get some help from employees of the company, it’s important to understand that they are not unbiased. As employees of the insurance company, their first loyalty is to the company – not to you.
When you work with an independent life insurance agent, that agent is working for you, not for the insurance companies. That is never to say that he will attempt to “pull one over” on the insurance companies, but rather that he will put your interests first in finding the best policy to meet your needs. He will be your advocate – like an attorney in court.
An Independent Agent Is Your Best Route to Affordable Life Insurance
So far, we cited the reasons why buying life insurance direct from an insurance company can be complicated, and how an independent agent can work to your advantage. Now let’s discuss the cost of working with an independent agent.
There is none!
It’s true that independent insurance agents earn their living from commissions paid by insurance companies. But those commissions are paid out of the basic life insurance premiums. They are not an additional cost added on top of those premiums.
Insurance companies pay independent agents on a discount basis. For example, though an insurance company may charge an annual premium of $1,000 for a $500,000 life insurance policy, that will be the premium – no matter who you buy the policy from.
As compensation for the service of bringing you, the client, to the insurance company, the company will pay the agent a percentage discount of that premium. That means that you as the customer pay nothing extra for the services of the agent.
Considering all of the benefits that you will receive by buying life insurance from an independent agent – and the fact that there is zero cost to you for doing so – contact an agent the next time you need life insurance.
And that’s exactly what we are. Call us for any and all of your life insurance needs. We’ll get you the most and the best coverage, at the lowest premium possible.
