By Anne Levy-Ward and the Sun Life team
You can buy life insurance online or from an advisor. But what is the difference? And how to choose between these two options?
You can buy life insurance online, sometimes without answering questions about your health.
It sounds simple and easy, and it is. But be aware that the life insurance offered online has significant differences from an advisor’s.
You need to understand them before choosing where to buy. Could you make sure you see it?
What are the risk factors that affect the purchase of insurance?
Insurance is used to protect you and your property against specific risks. In general, the higher the risk, the more expensive the insurance. Why? The chances of claiming benefits are higher. This is why life insurance usually costs more for:
smokers;
people with serious illnesses;
people in dangerous occupations such as loggers or roofers;
older people, as the risk of developing heart disease or cancer, increases with age.
What is the difference between life insurance purchased online and from an advisor?
To better understand the difference between life insurance purchased online and from an advisor, let’s talk about underwritten life insurance and guaranteed issue life insurance.
Life insurance with underwriting
It can be purchased through an advisor or online. In general, when you buy online, the pricing process is simplified. There are fewer questions about your health. The requirements depend on your age and the amount of insurance requested.
Life insurance with guaranteed issue
The guaranteed issue of life insurance that you buy online requires few or no questions about your health. This is why high-risk people tend to choose this product. As a result, there are more high-risk policyholders in the group of guaranteed issue contracts than in the priced group.
Insurance companies must adequately protect all those at high risk of premature death. As no question decides between healthy people and those who are not, a more significant premium is requested. The trouble is so high that guaranteed issue insurance contracts offer smaller amounts (usually no more than $25,000).
If your health is relatively good, it may be beneficial to put the time and energy into getting underwritten insurance.
You could pay less and be better covered.
In addition, the health check is not as expensive as it used to be.
