Thanks to the Internet, millions of people are buying health insurance and actually every kind of insurance online. While the auto insurance industry may have it down to a science, consumer experiences with life and disability insurance may vary.
“One giant pitfall is that many companies and broker sites require that people enter their names, email addresses and phone numbers before they will issue a quote,” said Richard Reich, President of Intramark Insurance Services (www.lifeinsure.com). “This almost always leads to your email box filling up and your phone ringing off the hook as multiple agents contact you to buy policies. Other sites show customers low quotes that may be unrealistic, and then requote to higher rates as they get more information from the customer. So, buying life and disability insurance online can still be still rife with pitfalls for the uninitiated consumer.”
Reich, an industry insider for nearly 20 years, has assembled a list of tips to help consumers navigate the murky waters of online insurance. His advice includes:
Make sure the insurance Web site you choose is not from a single insurance company -- When you get a quote from a single insurance company, all you’re getting is that one insurance company’s idea of what you can pay. There is no competitive analysis that you can do with a single quote. Moreover, you could wind up getting inundated with emails and calls from that company to see you about that one policy. The way to win at online insurance shopping is to get multiple quotes, without having to give up your personal information.
Choose a site with multiple companies represented -- When you choose a site that offers quotes from a great number of multiple companies, you’ll be able to assess your best deal based on multiple sources. This is much better for people who want choices and ability to make their own decisions.
Check financial ratings and strength -- The recent financial crisis hit a great number of the major insurance companies, so don’t choose based on reputation alone. Check their financial strength ratings with the consumer advocate sites as well as financial ratings companies like A.M. Best. Many of the ratings of reputable firms may have changed during the recession. Also, consumer advocacy sites also rate firms based on customer service, which is a key component of buying insurance. Getting a good rate is important, but if the customer service lags, then what are you really paying for?
Be careful of rate quote “Bait and Switch” -- Some companies might quote you the best possible quote initially based on incomplete information, and by the time they walk you through all the nuances of the policy and your health history, you may wind up with a much higher bill than anticipated. If your quote does not take into account your height and weight and answers to basic health questions, then it’s possible that you’ve been baited with an artificially low rate.
Check for electronic signatures -- Online consumers want convenience. How convenient is it to shop online, but then be required to go to a local office to sign all the paperwork and complete your transaction. Some sites are shifting to accepting electronic signatures to complete their insurance transactions. This is a time-saving convenience that online shoppers should expect from insurance Web sites.
“Online consumers should always beware of methods designed to get their personal information,” Reich added. “The simple truth is that insurance companies do not need your name, email address or phone number to offer you a genuine quote for life insurance, so don’t fall for this. Demand good service and free quotes from a large number of choices -- it’s what’s best for the consumer and it’s good business for insurance companies.”
Written by Richard Reich
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