I have written several posts about the state of life insurance websites today, specifically in regard to the personal data required by many sites and what happens to that data.  If you Google “life insurance quotes, you will come up with page upon page of companies offering “Free Quotes,” “Up to 70% Savings, “Lowest Prices on the Internet,” etc. (Disclaimer – it is the insurance companies that set the prices and that price will be the same no matter what agency you purchase from)

First of all, I have to say that shopping for life insurance on the Internet has become the online equivalent of an outside market in many countries – vendors shouting loudly to anyone who appears to have a few dollars (or the equivalent local currency) that their product is the best, least expensive, etc.  Of course quotes are free – why would anybody pay for quotes, you ask?  Well, you aren’t paying for them with money, but you may very well be paying with your privacy.

Many of the life insurance websites you see online are what we call lead-generation companies.  They collect your personal information and sell that information to life insurance agents/brokers for $15-$40, depending on how many agents purchase the information.  The more agents that buy your information, the less expensive the “lead” is.  In some cases, up to 8 agents/brokers purchase your information.  Is that what you wanted to happen when you were looking for life insurance quotes?  My guess is, probably not.

But wait, it gets worse.  If you are concerned about your privacy, there’s a new scheme I recently heard about that will give you further reason to be concerned.  In the example above, let’s say that 8 brokers purchased your information.  I found out that some of these lead purchasers are now selling your information to other brokers looking for leads, at a slight mark-up.  It has become a profitable business for some who purchase large quantities of leads, because they get a discount for volume purchase.  Maybe they paid $10 for the lead that would normally cost $15.  Now they turn around and sell it 6-8 times for $15 each and walk away with a tidy profit. If you do the math, you will see that your information is now in many more hands than you would like.

My intention is not to make you so scared that you never go to another life insurance website again.  That would be self-defeating, because, as an online life insurance brokerage, we also offer quotes and offer an easy way to apply for a policy.  My intention is to get you to really take a good look at the sites you visit before you attempt to get quotes.

Here is my advice for shopping online for life insurance:

1. Do not enter your personal contact information to get a quote.  It’s not needed and, if it’s a lead-generation site, your information will be sold to others.
2. Check out the website’s privacy policy and legal information.  Most reputable online life insurance agencies proudly publish this information.
3. If there’s no contact information or an “About Us” section, go find another website.
4. Unlike some other industries, don’t trust that the companies listed on the first page of Google are going to be the best companies to work with.  Unfortunately, many of these lead-generation companies have figured out how to trick Google into getting first page rankings.  Google eventually catches them and knocks them off of the first page.  However, these companies often have other websites waiting in the wings and move up the ranks to first-page prominence again.

I have to say that there are some fine companies out there who do a great job selling life insurance through the Internet.  However, most of them also collect your contact information before they will give you a quote.  While they may not sell your information to others, they will use your information to re-market to you through email and phone calls, until they either make the sale or you click the “Remove” button on the email.

I believe there are only a handful of companies that offer quotes without collecting your name, address, email address and phone number.  Since the day we opened for business on the Internet, LifeInsure.com has allowed thousands of visitors to come to our website and get their quotes anonymously.   We only require information when a life insurance application is requested.  And, we have never sold or given that information to another person or company (other than the insurance company the person was applying with).  We are quite proud of that record.

Looking for an online life insurance agency? There are many benefits of purchasing life insurance online, but it’s also important to make sure that you make a wise decision when selecting an online agency to handle your life insurance needs. Following the following three tips for choosing an online agency can help you select the best agency for your needs.

• Instant Quotes – One of the primary benefits of working with an Internet insurance agency is the ability to get information about life insurance online quickly and easily. Verify that your agency has the capacity to provide you with instant quotes, so you won’t have to deal with delays when researching policy options.  Also, if you can get the quotes without entering any personal contact information, that’s a bonus.
• Contact Information – When working with an online agency, it’s essential to be sure that the company you’ve selected is legitimate. Verify that the agency has thorough contact information published on its website, complete with a physical address and telephone number.
• Privacy Policy – When you purchase life insurance online, you’ll have to share personal information about yourself with the agency you select. Make certain that the organization you choose to do business with has a sound privacy policy. Make sure that your personal data will be handled securely, treated with respect, and that it won’t be shared with third parties without your consent. Verify that the agency has a published privacy statement on its website, and make sure that you clearly understand the information stated in it.

Permanent insurance policies are designed and priced for you to keep over a long period of time.  If you don’t intend to keep the policy for the rest of your life, this may be the wrong type of insurance for you. If so, it may be better to consider term life insurance or return of premium insurance.

The two main types of permanent life insurance are whole life and universal life insurance.  These have a feature known as cash value or cash surrender value.

Universal life (or whole life) covers an event that’s certain to happen; one’s death, while term covers you for the possibility of you dying during the term period.

The Difference between Whole Life Insurance and Universal Life Insurance

Here’s the difference in a nutshell – whole life guarantees the death benefit for life, guarantees the cash value and guarantees the premium – period.

Universal life insurance assumes an interest rate and the cost of insurance and comes up with a projected premium. If the insurance companies’ projections on their universal life policy do not come through, then you may have to come up with higher premiums later, have lower than expected cash values or even lose the policy.

However,  a recent development in the insurance marketplace is that you can now get universal life insurance and guarantee that the policy will last for a lifetime. It may lose its cash value but the insurance amount can be guaranteed for life.  This type of policy is known as Guaranteed Universal Life Insurance or Universal Life Insurance with lapse protection.  

Which One is Right for You?

This depends on several factor, the first being budget.  Whole life insurance is considerably more expensive than universal life, but if you can afford it and you like the idea of building up cash value (with significant tax benefits) in the policy, this would be a good choice for you.  If you are more interested in a lifetime death benefit and don’t care about building cash value in the policy, the guaranteed universal life option might be best for you. 

Many financial experts advise as to the best time to purchase life insurance.  They will often talk of significant life events that lead many folks to consider purchasing a policy – marriage, birth of a child, change of employment or increased income, to name a few.  There are also business events that can prompt one to purchase a life insurance policy.

However, I don’t ever see any mention of the times when you shouldn’t (or can’t) purchase a policy.  Unfortunately, we often receive requests from folks at times in their lives when it actually is too late to purchase a policy.  Here are a few examples:

• We received a call from a gentleman who was scheduled to undergo quadruple bypass surgery.  This was the “wake-up call” he needed to prompt him to finally stop procrastinating and purchase a life insurance policy so his family would be financially protected should anything happen to him.  Unfortunately, due to his pending surgery (and heart condition) he was not eligible for coverage.

• We get a lot of requests from people who have elderly parents or grandparents who are seriously ill and they want to purchase a policy so that, at the least, burial costs would be covered.  Unfortunately, we also receive quite a few requests for larger policies ($500K – $1 Mil) for the purpose of “leaving money for the grown children or grandchildren.”  Due to the advanced age and often, the illness, most of these people are not insurable.  Even if they were, the larger death benefits would not be approved, unless there was significant proof of insurable interest.

• We received a request just this week from someone asking if a life insurance policy could be purchased on a family member who was recently deceased.  This was certainly a first for us, so at first we seriously thought someone was joking with us.  Unfortunately, this was no joke – this person truly thought that perhaps one could purchase a policy on a deceased person and then receive the death benefit.  

While these examples might seem extreme to many, I can assure you that we get at least one of these types of requests weekly. It happens often enough that I thought it was worthy of a blog post.  The moral of this story is simple to see – you should buy life insurance when you’re healthy and when there is an insurable interest (a person or entity that would suffer financially if your income was lost to them).  Also keep in mind that the younger you are, the less expensive the premiums are.  The life events mentioned above are good times to review your need for new or additional coverage.

Figuring out how much life insurance death benefit you need to get can be quite challenging. Purchasing life insurance is an important decision, and it certainly isn’t one that should be made lightly. Selecting the correct amount of coverage is just as important as choosing the right type of policy. When you want to figure out how much life insurance is enough, a life insurance calculator can be very beneficial.

There are several different types of calculators available online. They’re free and easy to use. You can quickly and easily evaluate your life insurance needs using several different calculations, such as the human life value or multiple of earnings method. To get results, you’ll simply need to enter a few details about your goals, finances, and other relevant factors into the calculator of your choice.

Determine Life Insurance Death Benefit with the Multiple of Income Method

Looking for the simplest method of determining how much life insurance is enough to provide protection for your family without getting into formulas? There are a number of different ways to calculate the proper amount of coverage. While many different variables can impact the amount of coverage you need, the multiple of income method can be a quick way to determine the minimum amount of coverage you might need.  We do recommend though to take the minute or two to use the interest method described in these tips.

Life insurance calculator tip using multiple of income:

This technique for determining life insurance needed simply involves multiplying your annual income by a multiplier, based on your age at the time the policy is purchased.

• 25 years old? Choose life insurance valued at approximately 25 times your annual income.
• 35 years old? You’ll want to get life insurance that covers about 20 times your yearly earnings.
• 45 years old? Based on multiple of income method, it’s recommended that you get life insurance worth approximately 15 times your annual income.
• 55 years old? It’s a good idea to make sure that you’re life insurance policy is for an amount about 10 times your annual earnings plus any estate tax liability that may be due.

Calculating Life Insurance Needs with the Interest Method

When purchasing life insurance, it’s important to make sure that you’re getting enough coverage to provide your family with the protection and peace of mind that they need. The more coverage you get, the higher your premiums will be. However, if you don’t have enough coverage, you aren’t providing sufficient protection for you loved ones. That’s why it’s so important to put serious thought into answering the question, “How much life insurance do I need?”

It doesn’t have to end that way. The following information should clear up any confusion you might have encountered in your search for life insurance quotes. We have broken down life insurance websites into four categories to give you an idea as to why you have been having such a difficult time doing something (shopping for life insurance) that could have been much easier had you had this data beforehand.

The four types of life insurance websites are:

1. Life insurance company websites (e.g., Metlife.com, Guardianlife.com, Prudential.com, etc.) These sites have been established mainly for informational and branding purposes, but most also have forms on the websites where one can request quotes. Most of these companies will give your information to one of their agents and thus you’ll get quotes from that one company. Some insurance companies use independent agents and brokers to sell policies.  They will usually forward your information to one of these representatives to contact you and offer you quotes (and try to sell you that company’s policy). The main problem with shopping this way is you would have to contact each one of these companies separately to get competitive quotes from each. As a side note, there is no cost benefit to shopping this way, as the price you will pay for a policy will be the same, whether you go “direct” to the company or work with an independent agent or broker like LifeInsure.com.

2. Websites that have the appearance of consumer sites but are actually collecting your information to sell to agents, sometimes as many as eight times. These are lead-generation websites that collect your personal information and sell it to one or many life insurance agents for $20 – $50 a name. This business has become so lucrative that some of these lead-generation companies have established multiple websites to capture as many leads as possible. If you have ever entered your information on one of these sites, now you know why you received as many sales calls as you did.

3. Life insurance quote websites that offer quotes for and represent numerous insurance companies, but collect your personal information, including name, phone number and email address, before they will release quotes to you. The reputable companies that do this will protect your private information and won’t sell it to other companies. Unfortunately, not all the companies that do this are concerned about your privacy.  If you work with a company that does ask for this information just to offer you quotes, make sure you read their privacy policy thoroughly to ensure that your information won’t go out to other companies or brokers.  Additionally, you should know that the reason this information is being collected is so the websites’ representatives can contact you by phone and email to sell you a policy.  Some people don’t mind this, as they want to speak to someone before they make a purchase, but you should understand that, by submitting this information, you are giving this company permission to call and email you.

4. Life insurance quote websites (such as LifeInsure.com) that also offer quotes for numerous insurance companies but allow you to view those quotes online and anonymously (no personal contact information needed).  Then, only when you wish to apply for a policy or submit questions online, do you submit any information about yourself.  If you only receive a quote from this type of company (and do not request an application), they will have no way of contacting you. With this type of website, you can visit and take your time studying and reviewing quotes on your own time and only when you are ready, do you need to submit your information, or call to speak with a representative, if you wish.

No matter which of these four types of website you work with, make sure they are licensed to write life insurance policies in your state.  Most reputable websites will list their licenses, often in the Legal section of the website.  Also, as privacy is such a huge concern today, make sure the websites’ privacy policy is clearly stated. Spending a few extra minutes on these searches could save you a lot of difficulties down the road.

Related Article:  Tips On Purchasing Life Insurance Online – Getting Online Quotes And More

Even if your net worth is sizeable, your loved ones might not be able to access the assets quickly enough to take care of immediate financial needs. That’s why proper planning using life insurance can be so beneficial. If your estate plan doesn’t include life insurance, your family could face the difficult situation of not being able to manage the expenses of daily living, let alone cover the costs of your funeral.

When your estate plan includes sufficient life insurance coverage, your loved ones won’t have to worry about how they’ll find the money to make ends meet in the event you are no longer around. Proceeds from life insurance are paid directly to the named beneficiaries, so that individual (or those individuals) won’t have to wait out potentially lengthy and complicated probate proceedings to access the funds.

Protect Your Family’s Financial Future with Life Insurance

Proceeds from life insurance policies have saved many families from financial ruin. Even if you have a good bit of money saved to pass along to your heirs, account access can be tied up in probate for months. Funeral expenses, mortgage payments, car notes, and other expenses won’t go on hold while your estate is being probated. If you want to make sure that your loved ones won’t have to struggle with coming up with the means to pay these expenses, it’s essential to make sure that your estate planning efforts include a sufficient amount of life insurance.

• Age: The younger you are when you apply for life insurance, the lower your premiums are going to be.

• Health: Before you’re approved for a life insurance policy, you’ll be required to share information about your medical history, and you might even be required to undergo a physical exam. If you’re in good health, with no major illnesses or recent surgeries, you’ll benefit from lower premiums. If you have significant health problems, your premiums will be higher, if you’re even eligible for coverage.

• Smoking Status: Life insurance premiums are higher for smokers than for those who don’t smoke. If you quit smoking while insured, you’ll need to wait a year and apply for lower premiums. You’ll have to undergo a blood test to verify that you no longer smoke before your premiums are reduced.

• Occupation: Individuals who work in particularly high-risk occupations often have to pay higher rates for life insurance.