This Father’s Day takes on a new significance for me, as my wife and I recently welcomed our son into the world.

Parents know that planning for a child involves countless purchases and, as a result, purchase decisions. Those decisions include longer-term family planning, and life insurance fit into that bucket for me. While I have group life coverage through my employer (Thanks, ZS!), I sought extra coverage for added peace of mind.

Serving clients in this industry prompted me to take this as an opportunity to perform a controlled experiment: to compare the shopping experience first-hand across multiple purchasing paths for what amounts to an identical product no matter the insurer.

I did the following in a two-day period: First, I submitted two lead forms on two well-respected carriers’ websites that I knew from TV commercials. Finding and completing the forms was quick and painless.

Then I contacted a financial advisor whom my colleague recommended. Within 24 hours, I received a response from her assistant to schedule an introductory call. 

Finally, I visited an online aggregator that fancies itself as an easy way to price-shop across many insurers. I completed a form similar to those on the carrier websites but instantly saw monthly pricing for half a dozen companies. I selected a well-known carrier that had competitive pricing (more on that later) and clicked “submit.”

While the pre-contact experiences were all quick, the post-contact experiences deviated in the following ways, which were both expected and surprising.

  • Advisors who created confusion: I was struck by the different approaches that the two “lead form” carriers took. While both called the next day (great!), there were cracks in how they represented the carrier and how they educated me on purchase options.

    One carrier rep named Jake seemed very green from the moment he called me. He asked me to “hold on” as he got a pen (but he called me!) and then asked for my email address (but I entered it in the lead form!). His questions were choppy and disorganized. Curious as I was, I looked up Jake on LinkedIn after his follow-up -email. Sure enough, he was a recent college graduate who has nine months of advisor experience. While I’m sure that he’s a nice guy, I did not pursue further dialogue with Jake.

    The other carrier transferred me to an independent financial advisor named Joe, who was not a captive rep from the carrier. He established a nice rapport with me through open-ended questions, though after I told him I was interested in the carrier’s life insurance, his response surprised me: “That carrier is not your best option, and will not be the cheapest. They are conservative in underwriting and, as a fiduciary to my clients, I need to act in their best interest.” I appreciated how Joe positioned himself considering several regulatory movements and I obliged when he offered to price out multiple carriers for me.

  • Puzzling pricing: I always heard of the lack of price transparency in life insurance, but I didn’t fully appreciate it until now. Monthly premiums for what was the same policy were more than 20% different across carriers. Further, how the pricing was shared with me from the advisors left much to be desired. I received long PDFs containing dozens upon dozens of rates on one page, and then an exhaustive(ing?) “financial profile” comparison that had even more information and read as if it were churned from a gigantic mainframe: 50-plus rows of data across six financial strength categories for a handful of insurers. It was an overwhelming amount of information, and so much of it was irrelevant in my purchase decision.

  • More than life insurance: The referral-based advisor’s actions indicated to me that selling only life insurance wasn’t his ultimate objective. Knowing that I had a baby on the way, he broadened the discussion to financial and estate planning. While it was nice to learn the differences between a revocable and irrevocable trust, it wasn’t what I was interested in at the time. After I learned that he didn’t offer the product that I was after, the conversation ended quickly and I haven’t heard back from him since.

After the so-so experiences with the advisors, I ended up choosing the aggregator. A service rep from the website called at 8:30 the next morning and guided me through my application in a mere 15 minutes. It was as if he picked up right where I left off from the website. He acknowledged the carrier I selected and reconfirmed the monthly price, and then took me through a scripted dialogue to ask the remaining questions. He also pointed out that a lesser-known carrier offered slightly lower rates, but I said that I was willing to pay an extra few bucks per month for a better-known brand and “A” financial strength rating. The completed application initiated the next phase of the process (such as the health exam) that I will not cover here.

What I Learned

My experiment gave me an appreciation for how uneven the life insurance shopping process can be, and it shed light on possible reasons why life insurance purchase rates are at an all-time low.

  • A multichannel buying experience doesn’t necessarily mean a better one. In my shopping experience, information was lost in the shuffle and lead allocation was left to chance—risking a poor connection with an advisor. The carrier lead forms had more opportunity to gauge my preferences, but they relied on the right advisor questions to reveal them (which weren’t always asked).

  • Price non-transparency (and variability) damage buying interest. There were times in my journey when I questioned if I was “getting a good deal,” or whether the aggregator’s quoted price would be the same after the entire application. (It was.)

  • Financial advisors need to continue going where the customer wants, not the other way around. I may have entertained a follow-up conversation with that advisor about estate planning but not at that time. Instead, he came off as “all or nothing, right now,” and it rubbed me the wrong way.

As I see it, there’s still a lot of room for improvement if insurers look to reclaim the prominence that they had two to three decades ago. Their offerings may very well deliver the peace of mind to a customer at the life stage when it becomes most relevant, but if the buying experience does not match up, their continued success will be harder to come by. 


BLOG POST: What Insurance Agents Do (and Don't) Have in Common With Taxi Drivers

BLOG POST: Why Insurance Companies and Startups Go Together Like Peanut Butter and Jelly


Topics: customer experience, financial advisors, insurance, insurance carriers, insurance agents