What to watch for buying Term Life

I currently have a 10 year term policy from state farm that I am about 4 years through. I am looking to update to a 20 year term policy and have been searching around the internet for quotes. I received quotes from ING and AIG that were drastically lower than my current policy despite increasing coverage and extending the term (and the fact that I am now 4 years older (30)).

Is there something I am missing here? Is there something potentially in the policies that I am not thinking to look for that makes the huge difference in price (premium and death benefit for both are fixed)? Are AIG and/or ING reputable insurance companies?

Thanks very much for any help.

yes, internet quotes are NOTORIOUS for offering you a low premium to entice you to apply. then, after underwriting, they offer you a huge rate-up. since you already feel beaten down by investing all this time in getting the insurance in the first place, you just take it. it is a GREAT business model. just like a pick-pocketer in a NY subway ... you cant go wrong.

p.s. ING is not a terrible company. AIG is. bottom line is that you can never go wrong with an investment grade company and neither of these qualify. look into the old mutuals. you may also learn something through personal interaction with their folks that you obviously didnt get from the internet (no offense, but if you knew all about insurance you wouldnt be seeking my opinion).

1MO is exactly right. The quotes you recieve online will undoubtedly be the very best rating they offer. What rating did you originally receive with your current policy. If you don't know, it will be listed on the policy itself in plain language. If it's not Super-Duper Incredible Human Specimen Preferred, you didn't get the best rating for your State Farm policy in the first place and probably won't get a better rating elsewhere; depending on the reason.

Another thing to consider is that the insurance industry as a whole shifted from a 100 year mortality table to a 120 year mortality table a couple of years ago. Thus, overall premiums were reduced pretty much across the board because life expentancies were stretched out another 20 years.

For term, I like the big mutuals if you are EVER going to consider converting the policy. For inexpensive, quality straight term that will never be converted, ING is hard to beat...unless you are heavy, hypertensive or have cholesterol issues or have acne or bad breath or just plain look funny.

With my State Farm policy I did actually get the "Super-Duper Incredible Human Specimen Preferred" rate and I'm in better shape than I was then. However even just comparing the next tier down ING is still way cheaper.

Apparently AIG is out, but I would not be committing a mortal sin by taking ING if then numbers pan out? Can anyone recommend a specific (or two) other company I should look into? Who are the "old mutuals"?

Thanks again for all the information.

technically, if you received the super-duper blah blah blah rating; you really can't be in any better shape now (as far as insurance goes). its like a guy who has 130 billion net worth who just won the 5 million dollar lottery ... ho - hum.

one of the reasons why ING might be cheap is becuase they are not paying someone to advise you. all you get is what you read on their web page. that is all well and good but as pricespector points out you may opt to convert it later. do you know the best time to convert? are the conversion parameters fair to you? do you know what the conversion parameters are? if not, it might be more cost effective to get someone to look at your personal information and situation and to give you an education.

as for the old mutuals, the three at the top of MY PERSONAL LIST are New York Life, Mass Mutual, and Northwestern Mutual (aka Northwestern Mutual Financial Network). you are likely to pay more but these companies are SOLID. and they dont jack around with your beneficiaries if you get crushed by a falling piano.

If you really want to get the best deal, use a broker who can write applications with all of the companies that you are looking at. If you ask, they will most certainly be able to write you with two or more insurers of your choice, while underwriting one time (one nurse/doctor visit). Then you just hang out wait for the results to roll in and when you have real numbers and real offers, make the decision that is best for you.

Most brokers, even those affiliated with the large mutual companies, have access to all of these "discount" companies (at the same exact cost as online). However, it doesn't work the other way around. Anyone not affiliated with a big mutual CANNOT get access to the often superior mutual products.

People tend to believe that anything bought over the internet is cheaper, but it is a patently false perception. The commission is still there and goes to the corporation hosting the website. In fact, the commissions are often higher. You pay the same or more...for NO advice.

Or, if you are dead-set on doing it on your own, apply with two or three companies yourself. Of course if you do this, it will most likely require seperate visits from different nurses/doctors for underwriting.

I mean, why not pit them against each other? You'll have this decision with you for the next 20 years and you will know that you have received the best deal possible.

I often broker ING, Met, Pru, etal. However, I always apply with at least two (sometimes 3) different companies on behalf of my client. One of them will always be a big mutual. Many times the big mutual comes back with the best offer regardless of the prices quoted prior to underwriting. In these instances, the client has achieved the best of both worlds.