Term Life Insurance: Don't Get Scammed

You want term life insurance. You go online to get some. You see lots of websites. You compare rates on one of them. You apply with them. Then 8 different agents contact you!!!!

Not what you signed up for?

You successfully found your way to a lead aggregator; a website that generates leads and sells them to multiple agents.

To make sure you are not on a lead aggregator website: look for the about us section (look for pictures, emails, contact us forms that let you know this is a real company with real people). You could also read the fine print... they'll tell you if they're going to sell it to multiple agents. Also look for "our network of agents"... that is another giveaway that it's a lead aggregator.

What is a captive agent? A captive agent is someone that can only sell life insurance for one company.

Why is this bad? Most companies only have one price for what you're looking for, and chances are there's at least one other great company out there that has a cheaper price.

What should you look for? An independent agent.

Independent agent's can represent many life insurance companies, compare rates from all of them, and help you get coverage from the one that will give you the cheapest rates for the coverage you need. That way you never pay extra.

How can you find an independent agent? Look for websites that show lots of different carrier logos (American General, John Hancock, ING, Genworth, MetLife, Prudential, Transamerica, etc.). The more carriers you see listed, the better (and cheaper) it will be for you.

Some life insurance agents out there always quote everyone "Preferred Best" rates. What does this mean?

Preferred Best is the most healthy "rate class" anyone can get (it is sometimes called "Elite" or "Preferred Plus"). Almost no one can qualify for this price. If you are overweight at all, you're out. If you smoke, you're out. If you participate in hazardous activities, you're out. If you have family health history of cancer, diabetes, heart disease or other serious illnesses, you're most likely out. If you have personally had any of those illnesses, you're out. Basically, if you're not 100% healthy, fit, and in shape (with a documented workout schedule), then the chances of you getting this rate class are slim to none.

So why do agent's quote it? Because they want to offer you the lowest rates so you apply with them. An underhanded move in my book.

It's much better to work with an agent that understands the different carriers' rate classes and can give you accurate quotes. Then you won't be surprised at the end when the carrier comes back and tells you the price is twice as much as you thought it would be.

Life insurance rates are determined by something called a "rate class" or "health class".

The carrier (not the agent or agency) will try to find out everything they possibly can about you (that could affect your life expectancy) and then they assign you to a rate class. Better rate classes mean lower rates.

What type of info do they look for? They gather information from the following sources: age, sex, family health history, personal health history, driving record, height, weight, smoking habits, travel habits (do you go to dangerous places), hobbies (do you do dangerous things), job (do you have a dangerous job). The more hits on your life expectancy because of these things, the higher your rates will be.

Let's make this easy (because term life insurance always should be)...

Find an online life insurance website with the following traits:

A. They are a real company with real agents and advisors (i.e. not a lead aggregator). Do this by reviewing the fine print and about us sections.
B. Make sure they represent many carriers, instead of only one or just a couple.
C. Make sure the agent you speak with doesn't blow skirt up your pants, skirt, dress, or board shorts.

A good agent will take the time to discuss with you the items that will affect your rates: health history, driving record, height, weight, age, etc. They will use this information to advise you which carrier will offer you the best rates. All carriers have different rates for different types of people. The carrier that will give you the best rates is out there. Using an independent agent with a lot of experience will guarantee you the best rates.

If you're looking for a good site and company with good agents and advisors, I always suggest www.wholesaleinsurance.net.

Good luck!