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Viewer comment - From Pennsylvania...
I came across your web site in a last ditch effort to feel comfortable
with my decision to send in an application. I had one phone conversation
with a broker's rep who gave me virtually no info (compared to what I just
absorbed from your web site). I also got a big education on a lot of other
important information that the "other" rep neglected to tell me. Thank You...

Valet or Long-Term Parking? - Those "No Exam" Policies

Like most larger airports, when flying from Charlotte NC, we have the option of parking our car right in front of the terminal and have someone whisk it away to a reserved area and bringing it back when we return. No bags to haul - no shuttle to fool with - cost: $19 per day.

We also have long-term parking where you get to park a mile from the airport, schlep your own luggage and hopefully get a shuttle before you miss the flight. The cost is $3. Being frugal (cheap), I choose the less expensive route. Why, because I'm always looking for the best value (and I don't have a fat corporate travel account).

I approach life insurance the same way. Do you want something simple and easy and are willing to pay for it or do you mind a little inconvenience and save lots of money?

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If you've been looking for insurance on the Internet, you may have seen the new "no exam" policies being offered - I like to call them "Valet Life Insurance." The ads look like this:

"Purchase up to $250,000 of Term Life Insurance online in about 15 minutes - No Medical Exam - Just answer a few health questions! - Same day Coverage on all approved cases - 100% online application process - Print your policy today."

Looks good? No exam, no needles, no agents, 15 minutes and you're done.

There is one thing they forgot to add - that is:

"You get to pay 4-5 times more for this policy than one that requires a medical exam"

Yes, if you look closer and compare and if you are in good health and are willing to take a free short medical exam with a nurse, you can save piles of money.

Here's an example:

I went to Google and put in "no exam life insurance" - saw several links, picked one towards the top of the page. I asked for a quote for male, age 40, non-smoker, seeking $250,000 of coverage for 20 years. The annual premium came back at a little under $805. I then went to AmericaQuote (where else) - same info - premium $207.50. Over 20 years, the savings are $11,900. So you ask yourself, "I get a free physical and blood work and pay thousands of dollars less" - seems like a no-brainer to me.

And by the way, a 40 year-old could buy $1,000,000 of coverage for 20 years for $650 per year. So I'll leave that choice up to you.

Life Insurance Junk Mail... While I'm thinking of it, we all get junk mail. Some of the worst available policies on the planet come unsolicited in the mail. One company comes to mind as every year, right before my birthday, they send me a packet to "apply now before it's too late." This same package has been coming the last fifteen years. It's a "no exam" policy like so many. It's simple to apply for. The question I ask myself is, "who would buy something like this, it is such a rip-off." Well it must be profitable, as the company would not be sending it to me year after year. When something comes unsolicited, just compare the premium against our quote system and see for yourself.

One Day Later...Old Geezers, Pay Attention I wrote the above piece yesterday and it's funny, but today, I received (in the mail) a new life insurance solicitation. It's from a company I have never heard of. I won't mention the name for fear of getting sued. I'm turning 60 this year (2006), like half of America. They must have found me off a birthdates list as the policy is for those ages 50-74.

Here's their offer: $20,000 of life insurance "guaranteed renewable to age 80" (by the way, while I'm thinking of it, be sure to read the section titled "Be Clear About Guaranteed Renewability" later on). OK, $20,000 of life insurance that I can keep to age 80, then it stops - so far so good. How much will it cost me? The rate is a little over $50 per month. That's not great but not terrible. Here come the catch - the rate is only good for 5 years and changes every 5 years up until age 80. This changes things and looking further, the premium at age 65 is listed at just under $75. At age 70 it goes to a little under $125. The sheet doesn't show the premium from 75-80, nor could the representative at the 800 number listed. I can only guess it goes higher. One last nail in the coffin (sorry for that - couldn't resist) is that the rates are not guaranteed. They're only projected.

Let's compare that plan and what you can get with an exam. We don't have any term life policies in our database for less than $25,000, so I'll use $25,000 for comparison. I'll use age 60 and I want coverage to age 80 (with guaranteed rates). To keep it fair, I'll use Standard rates, not Preferred or Super Preferred. The monthly premium comes to $39.75 and guaranteed for those 20 years. In this situation, a little research and an exam would save over $12,500 and give an additional $5,000 of coverage. By the way, I just to throw in that the $25,000 could be purchased with a lifetime rate guarantee for $53.80 (at Standard rates). That's about the same cost as the first 5 years of the "no exam" policy.

One Last Thought On The Subject... Television is another medium that pushes over-priced contracts. The people targeted are usually in the 50-80 age group. The famous spokesman says, "your premium will never go up and best of all there's no health questions." This is true. The problem is many cases; the company will not pay a full death claim in the first three years of the policy. Most never notice that minor point until there is a claim.

You wonder why my industry has such a bad reputation...

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