The SmartMoney Test — Rate Expectations

UPDATED: Mar 3, 2020

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How much do insurance-quote services deliver?

Maybe the thought of sitting at your kitchen table answering a log of probing questions from a life insurance agent makes you shudder. So what about a quote service? Do these companies which seem to be popping up everywhere. really deliver on their promise to save you time and headaches by sniffing out the best deal for you all for free?

That’s what we wanted to find out. So we tested a handfulof services to see how quickly they would get us an answer, how easy they were to deal with and, of course, how good a rate they found us. We asked for the cheapest fixed annual rate on a 10-year term life insurance policy for a married New York couple seeking $500,000 each incoverage. For simplicity’s sake, we said both partners were 40 years old,and asked for preferred rates this generally means a healthy nonsmoker with no medical complications.

Remember that the reason most of these services don’tcharge you anything is that they’re getting commissions from insurers. So even if you find a good rate through a quote service, it’s smart to test the competition on your own. Glenn Daily, a New York fee-only insurance adviser, suggests contacting insurers like Ameritas and USAA directly. “Then it’s unlikely that you’ve missed a significantly better alternative,”he says. Also, cautions Peter Katt, a fee-only insurance adviser in Mattawan,Mich., be sure to check out a carrier you’ve never heard of even the best deal on a long-term policy isn’t worth it if the insurer goes under. That said, here’s what we found:

BestQuote

Availability: We submitted our request to the company’s Web site (http://www.bestquote.com/). BestQuote also has representatives working the phones 24 hours a day (800-328-2900).Results: $1,240 combined rate.

The response for the female half of our couple arrived in the mail in two days; the one for the male took four. BestQuote gave us four options for each member of the couple all of them American Mayflower products. However, in both cases only one of these options matched the criteria we specified. For the woman, the annual rate was $550; for the man, $690. We made a joint request since we had been advised on-line that “additional savings may be possible when a spouse is covered as well but there was no mention of these savings in the responses, which gave no indication that our requests were related.

Direct Quote

Availability: We had no trouble getting throughto a live rep during regular business hours, although after-hours or on weekends you’ll have to leave a message (800-845-3853). The agent asked about height, weight, tobacco use in the past three years, past medical history problems, prescription-drug use, cholesterol levels and occupations easily the most in-depth interview we encountered. Results: $1,165 combined rate.

Five days after we called. Direct Quote’s easy-to-understand package arrived in the mail. The best deal: If we took two CNA policies ($575 a year for the woman and $665 for the man), we’d get a $75-a-year discount.

Insurance Information

Availability: We couldn’t get through to a person when we called Insurance Information during business hours. So we left a message in the afternoon, and it was returned the next morning (phone:800-472-5800; e-mail: lll@cms. net). This service accepts no commissions from insurers, so it’s the only one that charges a fee, $50. The company promises to refund the money if its quote isn’t the lowest. Results: $1,065 combined rate.

Three days after we spoke to a representative, we received Insurance Information quotes for 10 “two lives” (married couple) policies, the cheapest of which came from CNA, at a combined rate of $1,065 a year. Unlike the other services we tested. Insurance Information does not actas an agent you have to contact the insurer independently to buy a policy.

QuickQuote

Availability: We used the company’s Web site, the only one we found that offered instant responses (https://www.quickquote.com). Results: $1,120 combined rate.

After just five minutes typing in our specs, we got three plans for each member of our couple. For her, the best deal was a $485-a-year Midland Life policy; for him, it was a $635 policy from Midland or North America.

Wholesale Insurance Network

Availability: We reached WIN easily by phone (800-808-5810 during EST business hours and Saturday mornings; or on the Internet athttp://www.ge.com/ Capital/insurance/ci5.htm). The rep questioned our request for a 10-year policy, suggesting that a permanent policy might be better for us, but backed off when we insisted that we knew what we wanted. Results: WIN faxed its response to us the day we called but it contained no 10-year guaranteed rates. Instead, the company touted some five-year policies. A customer-service rep told us these were “the best we offer for the state of New York.”

Carrie Lee

S M A R T M O N E Y

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