The Truth About Purchasing Life Insurance Online

These days, it seems as though almost everything can be purchased without leaving the glow of your computer screen or the ease of your smartphone; almost every product or service can be bought online.  

Until recently, however, that didn’t apply to life insurance. Why? Because the application process utilized when purchasing life insurance typically involves several “in-person” components.  There are paper applications that completed by an insurance agent, a telephone interview from a call center, medical examinations conducted by a paramedic who also obtained blood samples, a urine specimen, etc. and more.  This process had made it virtually impossible to simply sit down at your computer,  fill out an application online, and, if approved, obtain a quality life insurance policy in a matter of minutes (rather than days or weeks).   

Today, however, new technologies have emerged (and they continue to evolve) that allow a person to obtain life insurance that can be approved and issued without the requirement of paper applications, medical exams, telephone interviews, or extended wait times.  

But there are many misconceptions about online life insurance policies that we will address in this article to help you better understand the pros and cons of obtaining life insurance from the comfort of your living room. 

First, What Do We Mean By “Online” Life Insurance?

When we say ‘online life insurance’, we are referring to the ability to complete the entire process of obtaining life insurance electronically, from your computer, without speaking to an agent.  This process involves no medical exams, phone interviews of human to human contact of any kind.  The consumer reviews their options online, selects their coverage, and purchases it in one sitting.

We are not referring to the process whereby you click a link on the internet to request a “quote”, prompting someone to call or e-mail you in order to give you a recommendation of the carrier to apply to or otherwise assisting you in completing an insurance application with an insurance company. 

Are Online Life Insurance Applications Really ‘Instant’?

First, let us state the obvious. Obtaining life insurance online is not as simple, nor as fast, as flipping on a light switch or tapping a button on your phone.  While the application process is certainly much faster than the old way of obtaining life insurance, there really is no such thing as an ‘instant’ life insurance policy- at least not one where the death benefit immediately available.

With that in mind, the online life insurance process may only take 10 to15 minutes from the time you get a price estimate until, assuming that you are approved for coverage, your policy can be put in force and activated.  

When compared to the traditional approach that may involve a phone interview(s), someone coming to your home or to your office to conduct an exam or obtain “labs” (“labs” are typically a blood draw and a urine specimen), from a consumer’s standpoint, online life insurance is certainly a much less intrusive process. 

Once the online application is completed and submitted, the wonder of “Online” underwriting kicks in to determine whether you are approved.  This process is automated and can be extremely quick.  If you are approved, you can obtain a life insurance policy that is activated in just a few minutes!  That’s a far cry from a traditional application process that can take anywhere from 30-90 days (due to Exams, Labs, Attending Physician Statements needing to be obtained before an underwriter can review all of the information).

So, while they are not ‘instant’, if you are young, healthy, and able to be approved, you could obtain a policy from start to finish in less than 15 minutes.  While we don’t call it “instant”, we do call it fast (really fast compared to the alternative)!

How Can the Life Insurance Company Decide So Quickly?

The short answer? Technology.  Leveraging complex algorithms, machine learning, and available digital databases, an insurance company can actually determine quite a bit about you; that, coupled with answers you provide to the questions in the online application, allows the carrier to make a decision in a matter of minutes- not days or weeks.  

Is No Exam Life Insurance More Expensive than Traditional Life Insurance?

No doubt it is a little more expensive (but, as consumers, we’re accustomed to paying a little more for convenience, aren’t we?). In the recent past, life insurance companies conducted comprehensive exams and obtained blood and urine specimens on most of the applications submitted to them as well as ordering medical records from the applicant’s health care provider(s).  

Around 1980, largely in part due to the AIDS epidemic, most life insurance companies began obtaining exams for blood and urine specimens on most of their applicants; then, in the mid 90’s, largely driven by the data they obtained from the blood and urine results, life insurance companies were able to subdivide their underwriting classifications and offer lower pricing for the best risk classifications. 

So, if you are willing to have a paramedical exam, have your blood and urine specimen taken and analyzed, possibly have the insurance company review your medical records and then wait for an underwriter at the carrier to review all of that data (which often takes 30 days, 60 days, etc.), you can most likely obtain lower pricing than online policies that don’t require that information.

Who Should Apply for Online Life Insurance?

Typically, term life insurance purchased online is simple to obtain, and perhaps more affordable, for relatively young people in reasonably good health.  There are age restrictions associated with many of these policies.  For example, nonmedlifeinsurance.com offers a plan that can be issued to people between the ages of 21-55 years old.  It is a good fit for those who are looking for their first life insurance policy and/or who don’t want to go through the traditional process because of time constraints or simply wish to avoid the hassle of an exam. 

If you are older than 55, or have serious health issues, an online, no exam solution would probably not be a great fit for you. If you are over age 55, there are still very good, low-cost options available to you via a Traditional or Accelerated Underwriting approach.  For example, there are insurance companies that currently will consider someone for up to $1,000,000 of coverage if they are between the ages of 50 to 69 and have had a routine annual exam within the past 18 months with labs from their primary health care provider.  

What If You Have a Health Issue in Your History?

There are situations where a person is in reasonably good health but has a significant underlying health issue.  An immediate death benefit online policy most likely won’t be their best option. For those people, we recommend that they work with an experienced life insurance professional who specializes in “hard to place cases” and who has access to numerous insurance companies with more flexible health criteria.  

Decisions to issue policy differ from company to company and a person who wishes to purchase life insurance should research the best fit for themselves or contact a life insurance agent to better understand their policy options.  

What Are the Basic Steps to Obtaining An Online Life Insurance Policy?

Simplicity is the name of the game for online life insurance applications that don’t require exams and interviews.  The basic process is as follows:

• Visit a website such as nonmedlifeinsurance.com and obtain an estimate of the price for the coverage you want,
• Fill out the quote form with you date of birth, gender, height, weight, and tobacco usage,
• Determine how much coverage you want (anywhere from $50,000 to $1 million),
• Fill out the underwriting section completely and accurately,
• Await approval or denial (often in minutes),
• If approved, you can then bind the agreement with a credit card,
• That’s it! If you were approved and you purchased a policy, then your policy is now active!

The truth about no exam life insurance is that if you fit the criteria and are able to be approved, you will have excellent, affordable coverage in a much shorter time frame than had you gone the traditional route.  It’s a simple process and an excellent way to get started with life insurance or to purchase additional insurance for yourself.  Term life insurance is a great opportunity for you to protect your loved ones and your financial assets for 2, 10, or 20 years.  If this sounds like a good fit for you, hop on to nonmedlifeinsurance.com and check it out!