Online Life Insurance

I started selling insurance three years after graduating from the University of Miami with a Bachelor of Arts in French and Spanish language and literature and a minor in Education. Those three years in the classroom in the early 1970s taught me that earning enough income to raise a family could only be achieved outside the academic world. It’s why in July, 1972 I chose to become self-employed as a life insurance agent.

My livelihood hinged on my ability to convey trust in the company and the products I represented. My tools were a company rate book and a few blank applications that I carried with me all the time. As a Special Agent, I worked exclusively for John Hancock Mutual Life Insurance Company—an emphasis on Mutual, for when Clinton in 1995 signed the revocation of the Glass-Steagall Act, (The Banking Act of 1933), which had kept our banks solvent for 62 years by then, many mutual companies amended their charter to become public companies owned by stockholders. Bill Clinton’s signature marks the beginning of the financial meltdown of 2008.

When I began in the industry, the sales process involved three sit-down meetings with an interested prospect. The initial meeting was a fact-finding interview where the prospect explained his needs and I figured a way to resolve them. The second meeting was a presentation of my solution and if the prospect felt motivated to act upon it, the filling out of an application to start the underwriting process. The last meeting was the most important, as it allowed me to explain the policy and each of its coverages in detail, particularly the exclusions of coverage. Most of my policy-delivery presentations solidified strong business ties. Many of those early clients remain loyal to me after five decades. In many instances, the children and grandchildren of former clients rely on my experience and trust my professional advice.   

I’ve watched with dismay how carrying blank applications is nearly obsolete these days. Today, fact-gathering and policy illustrations require computers connected to the internet, software to input the data, printers that swallow ink like piranhas eat flesh, reams of paper and an endless review of the offerings the software programs produce. What I accomplished in an hour’s time from presentation to submission of documentation five decades ago, now takes four or five hours of toiling with servers and insurance offerings from tens of companies vying for the sale.

Needless to say, I find this current process surprisingly complicated, but it’s equally jolting to compare landline telephone conversations that were once crystal clear with today’s cellphone communication that often drop off at the least opportune moment or retain a less than audible static-riddled communication, often interrupting the message forcing one to guess what the other side may be saying.

In our do-it-yourself society, the online buyer has the ability to pick the cheapest option. But blindly choosing the cheapest coverage may not be the right course of action for a life-long commitment like the purchase of the right form of life insurance coverage. With an online offering the buyer is blindly unaware of quality of service, a pivotal component in a promise of future fulfillment that reveals its raison d’être generally when the buyer is no longer around and in his absence a designated beneficiary stands to receive the payment stipulated years before.

Sadly, an online life insurance purchase cheats the buyer. Not all in life is about buying the cheapest anything. Intangibles in particular are about a promise to deliver something agreed upon in the future. To top it off, life insurance contracts must remain flexible enough to allow for personal changes in the future and their inherent revision of financial goals. Buying life insurance online leaves one in the dark. It fails to explain the contract, its specific coverage, and its exclusions from coverage. It skips over the important differences among plans.

And the worst of all offenses in buying online is that both, the online agent and the agent taking the time to do a professional job receive the same level of commission for the sale of the product. Buying online gives no financial advantage to the consumer and if service can be quantified in dollars and cents, then the online purchase is many times more expensive than a face to face transaction.

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