The Basics
When buying life insurance via Internet brokers, it’s important to shop safe. That means knowing and understanding what a life insurance company actually needs to provide you a quote. Online services are predominantly comparison sites or consolidators. This means they provide access to multiple insurance providers, and a client potentially chooses the one that best suits their needs based on which providers like their profile provided. The profile only really needs to include the age of the person, general health, location, and occupation to get a rough idea of risk, at least for an initial cost quote. Consolidators definitely do not need a person’s social security number, and providing it only means a third party now has access to sensitive personal information. In fact, many sites allow a person to submit a request for an insurance quote with hardly any identifying information whatsoever.
Get the Best Price
To make sure one gets the best pricing, regardless of whether looking online or by phone, the best approach is to always perform a good amount of window-shopping. There is in fact a lot of variation between companies, and just going with the first one found is a fast way to spend more than necessary.
Quick quotes online often occur with very minimal data. This leaves room for big differences between a quote and an actual final price offered. The way to make sure the difference is minimal is to confirm the data used is as reflective as possible of your real situation in terms of age, health and related. If not, you may end up rudely surprised by a final policy that is far more expensive than the initial quote provided online. That will definitely feel a like a switch and bait, but in reality it’s based on running the wrong data.
Along the same lines, all the data you do provide needs to be accurate and real. The same principle applies in terms of generating accurate quotes. If you purposefully provide false data, the quote provided will be a false result. Further, especially with health data, the insurance company will eventually find the difference and ask questions during the final policy preparation phase. Almost all life insurance companies require a blood test as well as access to medical records for review.
Final Thoughts
Finally, irrespective of working with an insurance provider online, every company has a financial background that should be checked out. Because a life insurance company is in the business of paying out claims when people die, the buyer needs to know that the company will have sufficient funds to cover his policy if he dies prematurely. This means check in the solvency of the company before agreeing to a policy. Otherwise it’s simply throwing money away. When a claim really matters, the company won’t pay and a buyer’s family will be left out in the cold.
Online shopping can provide big savings. However, Internet buyers still need to practice common sense and protect themselves.
Tom writes about all matters personal finance.
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