(The events of this post occurred about 2 years ago)
Life insurance – easy to ignore until it’s too late. I was a 36-year-old husband, father of 2 (ages 6 and 8) and primary breadwinner for my family. I had 6 times my annual salary in a group life insurance policy through my employer. I knew 6x annual salary was decent, although less than recommended. And a drawback to employer-based group policies is when you leave the employer, you forfeit the insurance. The best time to buy life insurance is when you are in good health, otherwise you may become uninsurable or the premiums get too expensive. We are working towards FI. Eliminating debt and increasing our nest egg, so our life insurance needs should decrease over time – our balance sheet should eventually render life insurance unnecessary. With young children, spouse employed part-time, college 10 years down the horizon, life insurance is still needed. Here is how I purchased my first (and likely only) life insurance policy:
I planned to purchase term life insurance. This is important. If you are unsure of the type of insurance you want or intimidated by the decision, you will likely take no action or seek an advisor for recommendations. As a former financial advisor, I know that whole life policies are preferred by the financial advice industry for their high commission structure and product stickiness. In my opinion most young investors building their army of dollar bills are better off “buying term and investing the rest.” From years of listening to Dave Ramsey recommend Zander Insurance, I began there. Below is the required info for their quotes:
Very little information needed for the quotes. Reasonable rates for a 500k, 20-year term policy:
Over the next several days I received voicemails and emails asking me to contact a Zander agent. Irritating, but expected. I did nothing for about a month. Then I heard about Policygenius on ChooseFI. One of the hosts shared his experience with Policygenius. I appreciate the ChooseFI stamp of approval, so I checked them out. The website appeared well-organized and intuitive. Below is the instant quote process on Policygenius:
What differences do you notice between the two websites?
- Policygenius did not ask for my contact info for the quotes
- Cheaper rates
- Provided a quote code and offered multiple ways to proceed. I felt in control of the process
Small difference, but once you click “Continue” Policygenius asks for your email and phone number. You can continue to apply – activating an email to help you complete the application. I did nothing for a couple more weeks.
I returned to the website and found my quotes saved. I sent a message through online chat, “What number do I call to discuss my quote?” Within seconds I was provided the number. Quick answer, no phone tree, straight to a representative who was life-insurance licensed. Having worked in a call center, I found it very efficient that I got straight to the right person without having to enter info, sit on hold, or get transferred. During our 40-minute conversation I asked, “Why would I choose one of the policies with a higher rate?” His response gave me confidence to continue with the application, “we have vetted all these insurers and they are all top rated from a financial stability standpoint, so I feel confident in recommending any of them to you.” I heard: I’m not compensated to sway you to any particular insurer. It is same policy at each insurer with the same level of financial stability. The rep answered all my questions and kept the conversation on track.
Medical exam scheduled the following week on that call. Quest diagnostics offered exams starting as early as 7AM at home or work. The rep informed me I would receive an email to e-sign my application within 24 hours. Arriving that afternoon, I read and e-signed the app in about 5 spots. Next, I received an email with the two remaining steps: sign the application (done already) and complete the medical exam (scheduled).
The following week the nurse arrived 10 minutes ahead of schedule. I was provided a pee-cup and got that out of the way. At the kitchen table my two kids slurped cereal while the nurse conducted the exam. She recorded height, weight, 3x blood pressure check (not sure why 3 times), personal and family medical history, and then a blood draw. Which hurt, I think she was a little rough with the vein and nearly obliterated it. She said “oh looks like it’s bleeding pretty good,” afterwards. Other than that, the exam was painless and took about 45 minutes.
I received email confirmation from Policygenius that the medical exam was forwarded to the insurance company and to expect an answer within the next 4-6 weeks. I was surprised by an email confirming my approval (with a policy number) and that I would be contacted by Policygenius within the next 1-2 weeks to discuss payment and policy delivery. Policygenius did a tremendous job keeping me in the loop with timely emails. Under-promised and over-delivered on the timeline. Consider me a very satisfied customer.
End result: policy has been issued. No hiccups and overall smooth. From application to policy issued was 2.5 weeks. I appreciated the website interface and the rep I worked with. Between this policy and my employer-based coverage, I can now sleep easy at night knowing if something happens to me in the next 20 years, my family will be ok. Next up, create a legacy binder to store important information in case something happens to Sarah or I.
If you haven’t handled this critical part of your financial plan, what are you waiting on? Go to Policygenius now and start the process.