Would you buy term life insurance at Wal-Mart? How about at Target, Sam’s Club, Costco or Whole Foods. Many life insurance companies would like to know, and one company is trying to find out. MetLife is currently testing this new concept in 200 Wal-Mart stores throughout Georgia and South Carolina.
How it Will Work
Step 1. You visit a participating Wal-Mart store and purchase a ‘box’ of term life insurance. The cost will depend on your age and the amount of coverage you want. Anyone ages 18-65 can buy a policy for either $10,000 or $25,000. Prices start as low as $69 and go as high as $429. The coverage lasts for only one year, however.
Step 2. In the box, you will find instructions for calling MetLife and completing your application over the telephone. Yes, you must qualify for the coverage even though you bought it in a store. The call takes 10-15 minutes and you will either be approved or declined during that time. If you’re approved, your coverage begins immediately. If you’re declined, you can get a refund from the store.
Will People Buy It?
Although this sales approach is new and very limited, there does appear to be some interest in it. According to the 2013 Insurance Barometer Study conducted by the LIFE Foundation and LIMRA, 17 percent of respondents said they would buy term life insurance from a retail store. These are some of the reasons they gave:
63% – Reasonable Cost
44% – Simple Buying Process
43% – Convenience
Will You Buy It?
You may soon have the option of buying term life insurance at a big retail store. If this experiment works out the way MetLife believes it will, the program could be expanded throughout the country. And if that happens, you can bet more life insurance companies will follow suit.
But let’s look at some pros and cons to see if this is a good fit for you.
Convenience – Hey, you’re already at the store several times a week anyway, right? Why not grab a box of term life insurance at the same time you pick up a box of Cheerios?
Simple Process – A fifteen-minute phone is nothing compared to filling out an application online and completing a paramedical exam. You could do that on the drive to the office or after the kids go to sleep on a Friday night.
No Paramedical Exam – That’s right… No exam required. Just answer some health questions, and you are either approved or declined based on your responses. That’s it.
Cost – While many in the survey cited ‘reasonable cost’ as a factor for buying from a store, the cost of these policies is more than you would pay through the traditional process (application and exam). Think about it this way – you are paying for the convenience. Nothing is free, remember.
Limited Amounts – $10,000 and $25,000 policies may be enough for some people, but not for most. Of course, this is just a pilot program, and a permanent program could certainly include larger amounts of coverage. But it’s not likely those numbers will go into the several hundred thousand range. Larger policies are always going to require more thorough medical underwriting and an exam.
One-Year Limits – Once again, longer terms may become available at some point. And that would be good because you could lock in a lower rate over an extended period.
With all that said, this is a unique approach to selling term life insurance. And we are certainly anxious to see how it works out for MetLife. So now that you know a bit more, would you buy?
Sources: LIFE Foundation, MetLife