Let’s face it: we’re always on the hunt for the best deal. And who can blame us? Especially for seniors, getting a low rate on your life insurance can mean the difference between an effective financial plan and a money-sink that will cost more than it provides. To make sure you don’t get a policy that burns a hole in your pocket, follow the below advice to work with your life insurance broker on getting you what you deserve.
Work Directly With Brokers and Avoid Insurance Providers
The first mistake a lot of seniors make when buying insurance is to go right to the source. And in many ways, it’s understandable, as in many other industries it’s an effective way to negotiate a lower price. In the life insurance industry, however, this is a great way to get limited coverage, an unfair price, or even an outright denial – probably the worst thing that can happens to seniors seeking life insurance.
Only a handful of life insurance companies in Canada maintain a dedicated in-house sales force equipped to sell to the public. An even larger amount of business is not done directly between insurance companies and seniors buying life insurance. To complicate matters, many insurers large enough to sell insurance directly generally only offer simplified, no medical life insurance or guaranteed life insurance products.
And while there’s definitely a time and place for these products, what products are available to you without a broker are by and far the least competitive in price, the most limited in coverage, and certainly not in the business of offering the bottom line to you. To use an analogy: buying directly from an insurance company is like only buying retail products from what you see in the front window – you’re buying what the seller wants you to buy, not what you necessarily need.
Hit All the Angles to Find the Lowest Rate
This may fall into the realm of a trade secret, but it’s such a widespread practice that you should know about it as well. Experienced brokers, and perhaps the best mark of a dedicated and experienced broker, have a practice of submitting multiple applications to multiple providers, using both traditional life insurance and no medical life insurance as tools to negotiate better rates.
It’s a similar practice to submitting multiple proposals, or sending out multiple job applications. To any provider, your business is worthwhile and this allows your life insurance broker to help you negotiate directly with providers to get lower rates. Submitting both no medical and traditional life insurance applications also provides you the best of both worlds, and here’s why:
- If you’re in good enough health to qualify for lower traditional rates, your application is accepted and you’re good to go.
- If something in your medical history would get you rated or face a rejection under a traditional policy, you can get no medical coverage before such a response would affect your insurability.
For this reason, it’s almost always uniformly better to work with brokers who deal with multiple insurance providers. This gives you granularity and flexibility in choosing a superior life insurance policy. And with the difficulties seniors have in the life insurance industry, you need every tool you can get.
Maintain a Close Relationship With Your Broker, Before and After You Get Insured
Even if you were paying for a broker’s services, the service they provide for you is still a good deal. So it’s even better when you know that the services they offer to you are free of charge. Your broker is a financial ally, your consultant, and your advocate when it comes to your life insurance.
For that reason, it behooves you to always maintain a good, professional relationship with your broker. Treat them like a partner, and you’ll be surprised how dedicated most brokers can be in going that extra mile to help you negotiate better rates. Many of them have years and years of experience working closely with insurance providers, and have significant influence that you can use to your advantage when looking for a low, affordable life insurance solution.
In a day of e-commerce and arms-length business, the life insurance market still caters to working closely with professional advisors. For seniors looking for competitive life insurance rates, keeping a broker on hand is one of the most effective ways to ensure you’re getting the best deal and the right coverage.