Buying Life Insurance the New Way

Purchasing a life insurance policy does not have to be difficult or frustrating, that is unless you go out of your way to make it such.

When consumers turn to LifeInsuranceQuotes.com for their life insurance needs, they not only have access to affordable and quality quotes on life insurance, but also avail themselves to a wealth of information on this insurance product.

As it turns out, new reports show it is becoming easier to purchase term life insurance minus undertaking an extensive medical exam. For those individuals who are relatively healthy, it is important to note that they may have to pay added money for the convenience. ,

For individuals who acquire no-frills-term-life policies, they generally are required to provide blood and urine specimens, perhaps with more elaborate medical tests.

These days, insurance companies are starting to utilize computers to assess applications in tandem with prescription drugs and other data to come up with a person’s ability to be insured.

Recently, MetLife Inc. expanded its rapid E-underwriting program to 47 states. The program is open to buyers 18 to 40 years old for as much as $500,000 in coverage.

Different from permanent life insurance, whereby a death benefit is combined with a savings account, term life pays a set benefit in the event the insured passes away within a specified period.

While prices for term-life policies have fallen in recent years, sales have been dropping as financially challenged families trim expenses, more individuals relied on policies offered through employers and the number of agents fell.

Given those trends, insurance companies have simplified and sped up the application process in order to try and significantly improve sales.

Recent research from LIMRA notes that the number of all individual life policies sold annually nationwide has fallen 45 percent from 1985 through 2009, even as the number of households with children has grown by more than 25 percent.

In 2010, term-life sales dropped 12 percent, as measured by annualized premiums and number of policies. The drop was the biggest annual fall for the product dating back to when LIMRA began following data 25 years ago.

As it turns out, insurance companies are making a pitch for online sales of term life that skip the blood tests and other medical exams.

Prior to buying a policy, consumers should keep a number of factors in mind:

First, one may not be receiving the best price option in return for the convenience. Typically, the healthier one is, the better the price they will receive by purchasing a term policy through conventional means.

Secondly, consumers should be sure to comparison shop so that they can get a number of quotes to choose from. Just like when shopping for conventional term policies, there are endless options available when using online quote services.

Consumers should note that computer software plays an important role in determining how much of a risk an individual will pose.

When it comes to the “instant issue,” policies gain approval on the basis of an application by itself. The industry’s Holy Grail is by being less invasive and more cost- and time-effective than gathering blood and urine samples and sending them on to a lab for an analysis, followed by a review from an underwriting department.

According to one MetLife official, the newer process of e-underwriting will significantly better the number of individuals who actually finalize the process from application to payment. MetLife and industry research note that of 1,000 prospects who seek a traditional application, 250 complete it, 125 continue through medical underwriting, while only 80 end up purchasing a policy.

The insurer’s goal has been to reduce the original six-week sales process down to six or so minutes. With a telephone-based version now coming out, the process has shrunk to approximately six days, according to the insurer.

At the present time, MetLife employs a mix of computer decisions and human underwriting. The company says that as it betters the technology, it believes the percentage being made minus human underwriters will improve significantly.

MetLife notes that it believes so strongly in the ability of its proprietary “decision engine” to put together a picture of a purchaser’s health that it has done away with the option of controversial underwriting for all buyers of term-life policies between the ages of 18 and 40 who seek a term-life policy of as much as $500,000. All buyers who meet that criteria fall into the Rapid E-Underwriting area.

No matter how you are buying a life insurance policy, be sure to do your research so that you get the policy that best protects your loved ones.