Term quote factory
For cheap term, go online, Google “life insurance quotes”, click on the top search engine results, land into a life insurance quote factory, get the cheapest quote, talk to an agent briefly, get an application package by mail. Apply. Done.
Mr. Enterprise, age 46, with two children, wants a 20 year $500,000 life insurance policy in case something happens to him before his children grow up and graduate from college. He goes on line and gets the cheapest term possible.
The years go by. Mr. Enterprise has had a successful career but gained weight and didn’t exercise. At 63, he suffers a mild heart attack. At age 66, his 20 year term period is ending, Mr. Enterprise would like a $100,000 permanent policy for estate planning, but his term carrier only offers one very expensive and limited universal life conversion option.
This is a better scenario:
Mr. Foresight, age 43, wants a 20 year $750,000 life insurance policy to cover his family to replace lost income in his working years, but also thinks ahead for estate planning contingencies. His agent recommends two term carriers for conversion:
Genworth because “Term UL” has a guaranteed fixed rate universal life extension. During the term period or when it ends, one may lock in that fixed rate. The rate is fixed at the issue date. That’s 2012 rates.
North American because of their excellent conversion options for Indexed Universal Life. Mr. Foresight would really like to start permanent policy in the next few years to build cash value, but can’t swing it right now.
Mr Foresight decides on getting two policies: a $250,000 term with North American and a $500,000 term with Genworth. When ready to get a permanent policy, if healthy he can shop for the best available on the open market. However, if he has developed a health problem, he can go with either Genworth for the fixed UL rate or North American’s Indexed UL for building cash value, or both.
Term life insurance has two elements:
- coverage during the term
- options for permanent: that’s called conversion
Placing a quote request on a generic online life quote website could lead to an agent with a focus on the quickest sale, someone with no real knowledge of permanent life insurance, and possibly not authorized be your agent of record or for permanent life insurance.
Sometimes it may work out regardless. With Genworth low price and high quality dovetails, but many other carriers like North American, Lincoln, Penn Mutual and Prudential would never make it into the discussion because their term premiums are a bit higher. Unless you’re already all set for permanent life insurance, make sure you choose term insurance with permanent in mind.
Image source: Wikipedia Commons