Life Insurance Brokers: Online or Traditional?

Thang Truong
Thang Truong
Updated on:

When it comes time to consider buying life insurance, there are a lot of things to consider. You need to figure out how much insurance you need, what type of policy, if you want any riders added. One question that will come up early on is, where you should buy life insurance? Life insurance brokers may be a good option, but let’s take a look at all options:

Where to Buy Life Insurance?

You can buy life insurance in any number of ways, but some of the most common are:

  • Directly from an insurance company 
  • From a captive insurance agent
  • From a financial or investment advisor
  • Through a life insurance broker or an independent life insurance agent

Buy life insurance directly from an insurance company

Not all insurance products are available in all these channels. For example, you can’t buy a permanent life insurance policy directly from an insurance company. They will match you with an insurance agent and the insurance agent will work to find the best policy for you. You may be able to buy a term life insurance policy directly from some insurance company such as Protective Life Insurance or Globe Life Insurance, but not all. For example, you can’t even get a term life insurance quote from Northwestern Mutual website, you have to contact a Northwestern Mutual agent.

Buy life insurance directly from captive life insurance agents

A captive agent works for one insurance company only. A captive agent from State Farm can only sell you a policy from State Farm. If you want to buy life insurance from one of the four following companies: Northwestern Mutual, New York Life, AllState, and State Farm, you need to work with the agents that work for one of these companies.

If you want your insurance agents to help you compare quotes and coverages from different life insurance companies, a captive agent is not a good option for you. In such situations, you have to work with an independent agent or a broker who can help you shop around with several life insurance companies to find the best policy for you.

Buy life insurance from financial or investment advisors

Since life insurance can provide more than just protection, it can also provide supplemental retirement income through cash value account as well. Cash value life insurance such as whole life and universal life are often recommended as part of a holistic retirement planning by financial and investment advisors who are also licensed to recommend and sell life insurance policies.

In such situations, financial or investment advisors are also independent licensed life insurance agents. They can help you shop your life insurance application with several insurance companies to find the best one for you.

Online vs Traditional Life Insurance Brokers

If you want to buy a term life insurance policy, you should go directly to one of the popular online life insurance brokers such as Policy Genius, Quotacy, HealthIQ, or SelectQuote.

Term life insurance product is relatively simple and straightforward. There is little difference among the products offered by tens of life insurance companies. The main difference is price. Online life insurance broker offers the best tool for you to compare prices and select the best one for you. Some even allows you to buy a policy completely online without medical exam if you are healthy and your health history is good.

The Pros and Cons of Buying Term Life Insurance Online

Pros Cons
– Online quotes
– Efficient application process
– Insurance can start immediately, if you don’t need medical exams
– Available 24/7
– No pressure to buy
– If you need guidance or have questions about your particular situation, you’ll have to find the answer online
– If your insurance broker (a human one) is really good, they might be able to offer good advice; online brokers don’t have that, although you might still be able to call them and discuss any questions that you might have

If you want to consider a permanent life insurance policy, you need to contact a traditional life insurance broker or an independent life insurance agent or a financial advisor who is also licensed to sell life insurance in your city or your neighborhood. Permanent life insurance products are complicated and nuanced. You need proper advice to select the right product and the right coverage for your unique situations and goals.

It’s almost impossible to get online quotes for permanent life insurance policies, from whole life, guaranteed universal, indexed universal, or variable universal life because of the many variables associated with it. Only an independent life insurance agent or broker can help you shop around and compare permanent life insurance quotes.

Best Online Life Insurance Brokers

Policy Genius: Best for Anonymous Shopping

Policy Genius has helped 30 million people shop for insurance. They work with many insurance companies, but only those that have at least an A- rating for financial strength. 

One great thing about Policy Genius is that you can shop anonymously. They don’t ask you for your contact information to get quotes. If you decide not to buy insurance, no one will call or email you.

They also have tons of free resources on insurance to help you with the whole process. You can buy almost any type of insurance through Policy Genius:

  • Life
  • Renters
  • Disability 
  • Health
  • Homeowners
  • Auto 
  • Pet

It’s one-stop shopping for insurance.

Quotacy: Best for Most Friendly Customer Experience

Similar to PolicyGenius, Quotacy is an online life insurance broker who works with 50+ life insurance companies. They offer an eay-to-use online life insurance quoting system. Upon providing some of your personal information, it will provide you with term life quotes of a dozen of life insurance companies, most of which are A-rated.

The two main difference that Quotacy has from other online life insurance brokers are:

  • It has a much more consumer-friendly process than others. For example, Quotacy commits that it never calls consumers. It communicates with consumers through emails and encourages consumers to contact them whenever they feel comfortable. Consumers will never be spammed with phone calls.
  • It is single-focused on term-life insurance only. Nothing else.

HealthIQ: Best for Healthy People

Can you run an eight minute mile? Do you cycle at least 50 miles a week? If so, HealthyIQ can save you money on your life insurance. Healthy people may be overpaying for life insurance, and HealthIQ caters to this market. 

You can’t fake it: HealthIQ requires proof of your fitness, through either a gym membership, race entries, tracking apps, or videos. You’ll also answer questions regarding your nutrition, medical, and integrative wellness.

 Be aware that you can’t purchase life insurance online. You can complete the form, but getting life insurance requires talking to an agent.  

SelectQuotes: Best for Affordable Life Insurance

It’s likely that as soon as you google “life insurance” an ad for SelectQuote will be at the top of the search results. They were one of the first companies to serve as aggregators, which means getting quotes from multiple companies to find you the best one. This means you can choose the lowest rate and the policy that works best for you.

It’s free to use the service, but to get a quote you’ll need to call. If you do a quick google search, some people thought there was pressure to buy a policy and even pressure to buy other types of insurance.

Zander: Best If You Are a Dave Ramsey’s Fan

If you read Dave Ramsey, you probably know Zander. Zander is a life insurance broker that Dave Ramsey highly recommend to buy term life insurance policy. Its quote process is very straightforward and easy to use. You enter your contact information, select your health class (there’s a drop down menu to help you decide), the length of the term you want and how much insurance, and it spits out up to ten quotes within seconds. 

Thang Truong

Thang Truong covers small business insurance and small business success at BravoPolicy. He is a licensed P&C insurance agent. Previously, he held product leadership positions at, Capital One, NerdWallet, and Mulberry Technology. He holds a MBA degree from UC Berkeley - Haas School of Business.

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