What life insurance carrier to use?

April 17, 2006 8:30 PM

Recommend a good life insurance provider.

We've put off for too long getting basic term life insurance for myself and my spouse. I want to resolve this quickly -- no pressing issue other than the fact that I meant to get this done literally years ago and haven't yet - but I don't know how to go about evaluating insurers. Anyone with inside knowledge of who to look at -- or avoid? I'm expecting to spend a little while evaluating different companies/options, but I'd like to narrow the field down a bit first.

posted by BT to work & money (4 comments total)

well... i just went with whatever schwab was offering. things may have changed, but at the time (6 years ago) schwab was fronting several insurance companies, including zurich and great west. i ended up with policies from great west.

one tip is that you should own your wife's policy and she should own yours. its supposed to minimize tax problems when only one of you dies. but check with your tax adviser!

i guess i dont have any inside info though, sorry.
posted by joeblough at 9:24 PM on April 17, 2006

There is no reason to do this yourself. Call up (or just go on line to) Insweb, they will act as a broker for many companies and price a wide variety of options for you. Insurance policies are essentially the same, the only thing that varies is how they price (some charge a lot for international travellers, etc.) and whether the company is likely to stick around.

Insweb has a pretty stellar reputation - I used them and was very happy. Otherwise, just call a local broker. You aren't going to save money or time doing this on your own.
posted by blahblahblah at 11:05 PM on April 17, 2006

1) Buy some form of renewable term insurance unless there are specific reasons for needing a policy for a set period of time. The advantage of a renewable policy is that if you get sick in you later years, you have the option of keeping the policy going even though it may cost more to do so. If you but straight term, at the end of the period your coverage is gone--no options.

2) Buy a lot more than you think necessary in today’s dollars. Inflation eats away at the payout. If you bought a "large" $10,000 policy in the 1930s and it paid out in 2005 that $10,000 might be enough to bury you.

3) Most of us cannot afford enough “whole life” or cash value insurance to really benefit our family should disaster happen, and disasters do happen. Keep it simple. Buy the pure insurance coverage you need to safeguard your family. You are probably better off keeping investment potential separate.

4) Some of the mutual companies such as Northwest Mutual or Massachusetts Mutual provide quality products and the dividends can help keep costs down. I would not automatically count them out.

5) Agents make a lot more money selling cash value insurance as opposed to term. Guess which they want to sell you. If you are with a good company having an “agent for life” really is not that important. I would imagine much of the term insurance sold today is sold via phone or Internet. Nothing wrong with that, but do some research on the company. There are large companies that sell quality products and there are large companies that sell unbelievable crap.

6) I am not sure putting policies in the spouses name is always the best idea. I did that with mine and now my ex-wife owns the policy and has total control. As it happens, that is fine, but if I had remarried, I would have probably like to have retained control and transferred the policy to the new wife or kids. I am not sure of the tax implications.

6) My knowledge is pretty dated. There are products out there I have probably never heard of. I think the basics remain fairly constant. Buy enough insurance in terms of future dollars. Buy term because that is the only way most of us can afford to get as much insurance as we need. If possible, get as much as you will need today because it does not take a great deal to disqualify you or make insurance prohibitively expensive.

7) As you get older you find out that bad stuff can happen to any of us. Insurance can help and I think a good idea.

8) Any dummy can pass the insurance sales test. Being a “financial adviser” can be no more than what you decided to put on your business card this week.

Hope this helped.
posted by phewbertie at 11:43 PM on April 17, 2006

Thanks -- all good input. I actually went through both the Schwab and Insweb sites and got nearly identical quotes from some of the same insurers.
posted by BT at 6:28 AM on April 18, 2006