To buy or not to buy life insurance online

  • To Buy or Not to Buy Online

According to Forrester Research, sales of software, books, music and flowers had annual sales of over $37 billion in 2012 in the United States alone.  By 2015 the online retail industry will be worth $279 billion.  Not surprisingly life insurers in North America are trying to get in on the e-commerce space.  Today, not only do there seem to be an infinite number of life insurance products which you can buy, but there is also an equally infinite number of ways in which you can buy them – including online.

At the recent CAILBA Annual General Meeting held in Toronto the trend to purchasing life insurance online was hotly discussed.  According to a recent LIMRA study, today 61% of consumers will do their research online during the process of buying life insurance.  That’s a staggering number when you consider that it was 29% only nine years ago.  While nearly 40% of those surveyed did so for convenience, only 1-in-3 went online for life insurance because of better pricing.

The introduction of mobile devices certainly have changed the landscape as well.  Consumers now not only deal with companies on their own terms, but also when they want to deal with them as the convenience factor is also noted as being important.

The lure of buying online, particularly by Generation Y (those born from 1981 to 1990), is made most attractive to these individuals because it essentially cuts out the insurance professional and allows them to go direct to the carrier.  Everyone wants to avoid the middleman.

This leads us to an interesting question: Does it make sense to buy life insurance products online?

What’s missing from the picture above is that the majority of products which are currently sold online are term insurance.  This limited subset of product offerings is made even less attractive when you consider that there is no single point of contact which is made available to you when you have servicing inquiries.

The limited product shelf isn’t likely to change online anytime soon either.  Other permanent products such as whole life and universal life are much more expensive and complex to be sold without the aid of a licensed insurance advisor.  When it comes to life insurance and estate planning there is no substitute for advice from a licensed independent agent or broker.

Here are our Top-5 reasons why you should buy life insurance from an independent broker rather than buy direct online:

  1. Independent firms have the ability to sit with you face-to-face to complete a detailed fact-finding to understand your hopes and dreams and current financial situation, a gap in purchasing online today.
  2. Independent firms will give you access to the breadth and depth of products you require.  Whereas if you limit yourself to the online marketplace you’ll be limited to term-like products.
  3. Many independent firms will have access to multiple insurance carriers. This is vital as it will ensure that you have access to a breadth of products when it comes time to executing upon the strategy you’ve arrived at with your advisor.
  4. Dealing with independently licensed insurance professionals not only will help assist you in creating the foundation for a sound financial plan, but they can also help demystify a sometimes challenging and difficult application process.
  5. Your independent agent is always only a phone call, SMS or email away when it comes to servicing your policy or requesting more detailed information.  A striking difference when compared to buying direct online.

If you have any questions about this article or would like the assistance of one of our licensed professionals, please call us at 1.416.759.5453 or email us at

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