Life Insurance. Do you go with a local agent?

[Like2Plan]

Does anyone has experience with a local insurance broker?

DH and I are at an age where we are phasing our our life insurance right now. When we were in the market, we found our best option (for the most part) was with our employer due to not having any exclusions. ( I’m not making a recommendation—just that we had specific reasons for using employer ins. so we didn’t do a lot of shopping around.)

I was wondering if an insurance broker would be able to provide a more tailored approach with more knowledge of the underwriting process for different ins. companies? My experience (it’s been a while since I’ve sought a quote) was the online quotes could be optimistic— with a disclaimer that the quote was subject to a physical/underwriting. (I believe different ins companies have different underwriting/parameters.) Or, have the online quotes gotten a lot better?

[TexasHusker]

Does anyone has experience with a local insurance broker?

DH and I are at an age where we are phasing our our life insurance right now. When we were in the market, we found our best option (for the most part) was with our employer due to not having any exclusions. ( I’m not making a recommendation—just that we had specific reasons for using employer ins. so we didn’t do a lot of shopping around.)

I was wondering if an insurance broker would be able to provide a more tailored approach with more knowledge of the underwriting process for different ins. companies? My experience (it’s been a while since I’ve sought a quote) was the online quotes could be optimistic— with a disclaimer that the quote was subject to a physical/underwriting. (I believe different ins companies have different underwriting/parameters.) Or, have the online quotes gotten a lot better?

All companies are going to rate you with a medical questionnaire and blood test for a policy of any size. All quotes prior to these two items are optimistic regardless of the source, as most of us have at least something going on that triggers an upcharge.

I suppose that if you have a more serious condition - diabetes, etc., that a local agent might be of benefit in navigating the options. Certainly it never hurts to ask.

[Captain Save]

Does anyone has experience with a local insurance broker?

DH and I are at an age where we are phasing our our life insurance right now. When we were in the market, we found our best option (for the most part) was with our employer due to not having any exclusions. ( I’m not making a recommendation—just that we had specific reasons for using employer ins. so we didn’t do a lot of shopping around.)

I was wondering if an insurance broker would be able to provide a more tailored approach with more knowledge of the underwriting process for different ins. companies? My experience (it’s been a while since I’ve sought a quote) was the online quotes could be optimistic— with a disclaimer that the quote was subject to a physical/underwriting. (I believe different ins companies have different underwriting/parameters.) Or, have the online quotes gotten a lot better?

Your life insurance agent SHOULD be able to work with this. what Texas Husker was alluding to earlier is that many local agents are primarily P&C agent and not necessarily focused on life insurance. Your local P&C agent who does not have a life specialist in house will probably not be that well versed with underwriting.

The key is to find a life insurance agent who is knowledgeable about underwriting whether it's local or online.

[disneysteve]

I also think an agent is helpful when buying other types of insurance, like disability. You want someone who understands what you do and what your job involves to make sure you get coverage that actually covers you for what it needs to.

[Captain Save]

All companies are going to rate you with a medical questionnaire and blood test for a policy of any size. All quotes prior to these two items are optimistic regardless of the source, as most of us have at least something going on that triggers an upcharge.

I suppose that if you have a more serious condition - diabetes, etc., that a local agent might be of benefit in navigating the options. Certainly it never hurts to ask.

you don't need a serious condition for you to need help with underwriting .. less than 10% qualify for super preferred rate ..

and it's probably even less if you take into account qualify for super preferred for every single company out there.

This means you will probably need some underwriting help.

Now if your premium is $25 / month. and you make a decent living it's not a big deal.

Also do not overlook lifestyle issues.. speeding tickets, DUI, foreign travel etc..

there's a company that will rate you super preferred for medical marijuana use (depending on the reason) ..

[Captain Save]

I also think an agent is helpful when buying other types of insurance, like disability. You want someone who understands what you do and what your job involves to make sure you get coverage that actually covers you for what it needs to.

Disability is very nuanced.. you need someone who specializes in disability insurance. Most agents don't because it's a lot of work for little reward (tough underwriting, lot of declines .. people consider it expensive etc... )

It can really cost you .. and disability is not black and white. so there is more liability for the agent.

With life insurance , you're either dead or alive.

[disneysteve]

Disability is very nuanced.. you need someone who specializes in disability insurance. Most agents don't because it's a lot of work for little reward (tough underwriting, lot of declines .. people consider it expensive etc... )

We consider it expensive because it IS expensive. I can't wait until I get to the point where I can drop my disability coverage. It will give me a nice little boost as I head into retirement.

[Benderz]

Usually if LTD is offered by your work, its not that bad a deal. Sort Term Disability isnt needed if you have a good emergency fund. Look out for the exclusion period. I think 180 days is standard. Plus if you have a choice you want to pay for it after taxes otherwise you will have to pay tax on the benefit. You want to policy to cover your own occupation and not any occupation.

[Like2Plan]

We consider it expensive because it IS expensive. I can't wait until I get to the point where I can drop my disability coverage. It will give me a nice little boost as I head into retirement.

At what point will you drop yours? DH elected not to sign up for LT disability when he started at a new company last year. The policy coverage lasted until age 65 (or 2 years whichever is longer) with a 180 day exclusion period. DH at the time was already 62 and could retire anyway, so we decided the scenario was similar to why we were getting rid of the life insurance. He has ST disability (the difference being the company picked up the total cost of ST, but we would have had to pay for LT).

So, do you drop disability ins when you reach financial independence or do you keep it for as long as you are working?

Edited to add: (or, you won’t still be working beyond the day you reach FI? )

[GoodSteward]

If you leave that specific employer and they have a pass though program, it would be nearly seamless.

Typically, you only have PL options with this route from my understanding. I inquired about ours and found you can only roll it into a WL if you leave, so it seems this is common (and useless).

Please do not tell a random person to cancel a whole life policy. Depending on how much cash they had build up in relation the the premium paid, it could be a taxable event.

Chances are if it's early in the process, cancelling won't hurt much, but unless you have all the right information, you should not give blind advice on what to do with a whole life policy.

You are right. This answer is used a lot, and I don't think the side effects are taken into account very often.

I think you should use a local agent that matches close to what you see online (so you know if the rate is good), because someone is getting paid for writing up that application regardless. A local agent, that cares, will help you understand how much you need. Sadly, few companies are Term only and you will likely get sidelined into buying Term with a little WL "to get started." My local Farm Bureau did that. I asked for a quote on term, and they came behind trying to get me to buy some WL too.

As for the length, getting locked into a 20-30yr rate is good, but I suggest in your mid 30s when income has increased and assuming health is still good, I would relock rates into a new 30-35yr Term to carry into retirement. the difference in monthly rates between 20s and 30s isn't that big. The difference between 20s and 50s is massive, and even more unsettling as you get older. So if you lock in a 30 yr at 25, and you can't retire until you are 67 and wait to do anything with the term until mid 50s, trying to re-up that policy will be very hard. In fact, you likely will take a massive hit in coverage too for more per month if you even qualify. This is all assuming you carry debt well into those years and still need/want coverage.

[FLA]

Usually if LTD is offered by your work, its not that bad a deal. Sort Term Disability isnt needed if you have a good emergency fund. Look out for the exclusion period. I think 180 days is standard. Plus if you have a choice you want to pay for it after taxes otherwise you will have to pay tax on the benefit. You want to policy to cover your own occupation and not any occupation.

Really look into the LTD offered by your work. It is often only for management or salaried employees. It can be very strict in what it covers and for how long. the parameters for mine are way stricter than SSDI. The agent basically told me, "don't count on getting this and if you get it, don't count on having it long." So far I've been lucky.

I would shout it far and wide, get your own disability insurance, planning on your job is not planning.

[FLA]

Ex-husband and I went with my parents' local agent for Prudential and signed up for WL because I was 24 and stupid. I read one of Jane Bryant Quinn's 500 pg financial books, realized my mistake and canceled it before we had done the medical. Have had term through Amica, no local agent, ever since with no issues, I'm 48 now.