Can You Purchase Life Insurance Online?

How to Get Coverage Quickly and Easily

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You bank online, shop online, and you might even spend a significant portion of your day working online. So, when you need life insurance, it’s reasonable to explore your options for buying coverage online. But it’s important to understand that some online options may be better than others, and in some cases, applying for life insurance the traditional way may even be best.

Can I Buy Life Insurance Online?

Yes. When you buy life insurance online, your application might be approved almost immediately. But immediate coverage doesn’t always equal the best or most affordable coverage. There are several options for buying life insurance online and some may be better than others.

“Instant” life insurance coverage, which provides coverage immediately (assuming your application is approved), is just one option. Using a process known as “accelerated underwriting,” insurers can issue policies without the need for an exam or other cumbersome steps. To do so, insurers use computer models and third-party databases to evaluate your application. This approach is most comparable to traditional underwriting—which requires a paramedical (“paramed”) exam—and may provide the most competitive rates online.

If you have significant health issues, you might consider a policy that uses “simplified underwriting.” These policies require a less thorough review of your history relative to accelerated underwriting. But as a result, you typically pay higher premiums.

You can also get life insurance through a “mostly online” process. In this case, you can apply online, but instead of instant approval, you may need to complete additional tasks or wait for the insurance company to more thoroughly review your application. Still, the process is most likely less burdensome than a traditional life insurance experience.

Policies issued “instantly” or via accelerated underwriting are more commonly available for term life insurance, and may limit coverage amounts and/or only be available to applicants up to a certain age.

If you want permanent coverage, a more generous coverage amount, or don’t meet age requirements, your application may need to undergo traditional underwriting, which could take weeks (or longer) and include a paramed exam.

How Does Buying Life Insurance Online Work?

Provide Information

When you apply for life insurance online, you provide details about yourself. That includes basic identifying information like your name, address, and date of birth. You’ll also need to name any beneficiaries you want to receive the death benefit.

Insurance companies typically ask about your lifestyle during the application process. Tobacco and alcohol use are crucial topics; insurers also need to know about any potentially dangerous hobbies you engage in. If you enjoy adventurous activities like rock climbing, scuba diving, and skydiving, you may need to provide additional information about those hobbies.

Tobacco, alcohol, and dangerous hobbies don’t rule out coverage. By being honest about your activities, you can ensure that if you die in an accident or event related to the activity, the insurer will honor the contract and pay your beneficiary.

Expect to answer questions about your health, your health history, and your family’s health history. Your height and weight are common questions on life insurance applications, and you might need to provide details about your medical history. You may also need to describe medical issues that you’re aware of in family members.

Allow Insurers to Review Your History

Insurance companies research your health history and other details through third-party databases. For example, they can see historical insurance applications and claims through the Medical Information Bureau (MIB). They also review motor vehicle records and impaired driving incidents or other adverse entries that can affect your ability to get coverage. Insurers can even see what prescriptions you’ve used to get a better understanding of your health history. They might also review your credit history to understand your financial habits and risk profile.

Complete a Paramed Exam (If Applicable)

Depending on the insurance company you choose and the details of your application, you might need to complete a brief medical review, or paramed examination. You do not pay for this, but you may need to answer additional questions, provide blood and urine samples, and allow the paramed to measure your height and weight. Visits typically last less than 30 minutes, and they can happen at your home or workplace.

If you have excellent health, you might benefit from completing a paramedical exam. By proving how healthy you are, you could qualify for lower rates.

Pay Premiums

With some policies, you make your first premium payment immediately after submitting your application. When you do so, you can potentially secure coverage immediately. It’s typically a good idea to start your coverage as soon as possible because accidents or illness can strike at any time—there’s little to gain by waiting. However, if there are any issues with your application, the insurance company may require more information before coverage begins.

Tips for Purchasing Life Insurance Online

Shop Around

Get quotes from several life insurance companies, or work with a broker that can quote multiple insurers. You can also use “aggregator” websites that provide quotes from several different insurance companies, enabling you to compare prices with a single search. Depending on your health, the amount you’re buying, and other factors, different insurance companies might compete for your business. Plus, with a complicated health history or dangerous hobbies, some insurance companies might be more attractive than others.

Use Highly-Rated Insurers

As you shop among insurance carriers, limit your search to financially strong companies. You need that company to be around for several decades—with the financial resources to pay large death benefits. To evaluate companies, review their ratings with agencies like A.M. Best, Fitch, and Standard & Poor’s. Check the ratings from at least two agencies, as each may view insurers differently.

Put Your Best Foot Forward

If an exam is required, take the process seriously. The results will affect how much you pay for premiums—or whether or not you receive coverage. Begin by understanding what to expect during the exam. That way, you’re less likely to get caught by surprise, which can help keep your blood pressure low. It’s also smart to eat healthy foods, drink plenty of water, and avoid alcohol for several days before your appointment.

Ask your insurance provider for tips on how to prepare for the exam. Some companies suggest that you don’t eat, exercise, or drink anything besides water for at least eight hours.

Know When You’re Covered

As you research online life insurance providers, pay close attention to when your coverage begins. With some policies, you may receive coverage almost instantly after completing an application and making a payment. For that to happen, you typically need to have excellent health and favorable information in medical databases.

Life insurance policies have a two-year contestability period. If you die within the first two years after the policy is issued, the insurance company will closely review your application for inaccuracies or missing information that would have led to a refusal of coverage. If any are found, the death benefit might be reduced or eliminated.

Even if you have to take an exam, you might get coverage quickly. Under certain circumstances, you’re protected as soon as you complete your application and pay. If you happen to die before your exam or before the application is officially approved, your beneficiaries might still receive a death benefit—assuming you otherwise meet the insurer’s requirements.

Key Takeaways

  • Buying life insurance online can be an easy way to get coverage quickly.
  • Not all instant-issue policies use the same underwriting criteria—some may be more advantageous than others depending on your health and other factors.
  • In some cases, coverage begins immediately, upon completing an application and submitting payment.
  • Completing a paramedical exam, if required, could potentially help you save money on premiums.
  • If you want substantial coverage or a permanent life insurance policy, you may need or want to undergo a more traditional application and underwriting process.

Article Sources

  1. National Association of Insurance Commissioners. "Accelerated Underwriting."

  2. American Academy of Actuaries. "Simplified Issue and Accelerated Underwriting." Page 5.

  3. Texas Department of Insurance. "Life Insurance Guide."