- When most people think of getting insurance quotes online, they think about car insurance, but the life insurance business is surging in cyberspace.
According to comScore, an online market research firm, searches for life insurance information grew to 16.6 million queries in 2009, charting an increase of 15 percent over 2008. During the same time period, consumers requested more than two million online quotes for life insurance, a sign that consumers are warming to the Internet as an instrument for sourcing life insurance.
"The numbers don't surprise me at all," said Richard Reich, of www.lifeinsure.com. "The consumer experience for life insurance customers online has improved dramatically over the last couple of years, even though some obstacles to continued growth still remain."
Reich, an industry insider for nearly 20 years, said that the majority of the consumers represented in the study wound up on specific company sites, instead of sites that broker for many different companies. Those consumers were likely to have a less than satisfactory online experience, he added.
"One giant pitfall is that many companies require that people enter their names, email addresses and phone numbers to get life insurance quotes," said Reich. "This almost always leads to your email box filling up and your phone ringing off the hook as multiple agents contact you to sell you policies. Other sites show customers low quotes that may be unrealistic, and then requote higher rates as they get more information from the customer. So, buying life insurance online can still be rife with pitfalls for the uninitiated consumer."
Reich's advice for consumers looking for life insurance online includes:
• Make sure the insurance website you choose is not from a single insurance company - when you get a quote from a single insurance company, all you're getting is that one company's idea of what you will pay. There is no competitive analysis that you can do with a single quote. Moreover, you could wind up getting inundated with emails and phone calls from that company to sell you that one policy. The way to win at online insurance shopping is to get multiple quotes, without having to give up your personal information.
• Choose a site with multiple life insurance companies represented - when you choose a site that offers life insurance quotes from a great number of companies, you'll be able to assess your best deal based on multiple sources. This is much better for people who want several choices and to make their own decisions.
• Check financial ratings and strength - the recent financial crisis hit a number of the major insurance companies, so don't choose based on reputation alone. Check their financial strength ratings with the consumer advocate sites as well as financial ratings companies like A.M. Best. Many of the ratings of reputable firms may have changed during the recession. Also, consumer advocacy sites rate firms based on customer service, which is a key component of buying insurance.
• Be careful of rate quote "Bait and Switch" - some companies might quote you the best possible rate initially based on incomplete information, but once the insurance company reviews your medical exam results and health history, you may wind up with a much higher bill than anticipated. If your quote does not take into account your height and weight and answers to basic health questions, it's possible that you've been baited with an artificially low rate. (Note: The final rate will always be determined by the insurance company upon completion of the underwriting process. However, the more information factored into your original quote, the closer that quote will be to the insurance company offer).
"Online consumers should always be wary of methods designed to get their personal information," Reich added. "The simple truth is that insurance websites do not need your name, email address or phone number to offer you a genuine quote for life insurance, so don't fall for this. Look for websites that offer free quotes from a large number of companies that you can get anonymously. Only submit your name and contact information when actually applying for a policy - it's what's best for the consumer and it's good business for insurance companies."
About Richard Reich
Richard Reich attended Penn State University and has been in the life insurance business since 1991. He is licensed to sell life and disability insurance in all 50 states and the District of Columbia.