Why Is It So Difficult To Get Life Insurance Online?

You can purchase term life insurance policies online in just minutes, but you'll pay higher premiums in exchange for skipping a medical exam.

Rachel H.

Published November 12th, 2020

Fully underwritten life insurance requires an in-depth look into aspects of your life like your health records, hobbies, where you live, and what you do for a job. You may have to complete a medical exam, including a blood draw, before the insurance company will issue your policy if you want the lowest rates and you’d like a sizable policy.

A no-exam term life insurance policy may only be available for applicants under a certain age. If you choose no-exam life insurance and you are young and healthy, expect to pay more for your life insurance than you would if you agreed to a fully underwritten life insurance policy.

Is it OK to buy life insurance from any company online?

Life insurance companies must follow strict state regulations where they operate. So while you can buy a life insurance policy from any licensed online seller, it’s smart to shop around for a reputable company.

You’ll purchase life insurance to provide for people who depend on you for financial stability. If you die, you want those people to have the financial security offered by your life insurance proceeds. If you purchase life insurance from a company that has a reputation for terrible customer service or if they routinely stall when it’s time to pay life insurance proceeds to beneficiaries, you may be setting up your loved ones for trouble.

What happens when you apply for life insurance online?

When you fill out a request for life insurance online, you’ll have to submit your personal information, like your social security number, address, and date of birth. If you choose a policy that doesn’t require a health exam, you may be approved in just a few minutes.

There’s an additional cost for the convenience of a simplified underwriting, though. Life insurance policies issued without a thorough investigation into your health records and a medical exam have higher premiums.

There are many types of life insurance policies available, but if you want whole life insurance or universal life insurance, it’s crucial to speak with an insurance expert so you’ll have the help you need designing your policy.

Whole Life

Whole life insurance does not have a set term. It comes with fixed premiums and never expires if you make on-time payments. It also builds cash value that you can access various ways, even if you decide to surrender or cancel the coverage.

Universal Life

Universal life policies are more complex forms of permanent insurance. They come with investment components and adjustable premiums. They have a cash value, serve as managed investments, and you can borrow against them.

Term Life

Term life insurance offers financial protection during a set period of time. The policy does not increase in value over time and premiums are not refundable. You can choose the amount of time you want coverage and the amount of money you want your beneficiaries to get upon your death if you die while the policy is in force.

No-Exam Life

No-exam life insurance gives you coverage and a death benefit without submitting to a medical exam. The premiums for no-exam life insurance are higher than for traditional policies because of the lack of a medical exam; the coverage is usually capped and often comes with graded death benefits.

You may not be able to purchase the life insurance policy you need online. State regulations and the underwriting process make selling larger or more complex policies online impossible for many companies.

Many people struggle to choose a life insurance policy online

Before you can buy life insurance online, you must decide which type of policy you want. Even if you are shopping for simple term life coverage and you are in good health, you’ll benefit from going through full underwriting. With no-exam policies, you may not get the customer service support you need to make the right choices for your family.

Life insurance is a crucial part of any comprehensive financial plan. Aside from the extra time it takes to go through full underwriting, there are few disadvantages to choosing a life insurance policy type and pursuing the best possible premiums with full underwriting.