Traditionally, policy-seekers would have to talk to an agent or another company to apply for and receive life insurance. Today, those who want life insurance have more options: you can purchase life insurance directly from an insurer without needing to talk to an agent or use a third-party service. This direct term life insurance is also known as “DTC” (Direct to Consumer) insurance—and, usually, you can do it all online.
The definition and meaning of direct term life insurance is very similar to other term life insurance you may have heard of. “Term life,” in general, gives you a set amount of death benefits for a certain period of time. Popularly, it’s life insurance that lasts 10, 20, or 30 years in exchange for guaranteed benefits and lower premiums.
There are important reasons that choosing term life insurance has become popular, and it helps to understand how it works before jumping to what direct term insurance is. Primarily, many choose this kind of life insurance because it’s less expensive when the top reason to go uninsured according to Statista is overly high premiums.
Term policies are also incredibly simple to understand and sign up for without complicated contracts and conditions. Being just as affordable, straightforward, and convenient, a direct term life insurance policy takes the same structure with a few more advantages and benefits.
Faster Life Insurance Approval (Plus Freedom)
Simply by answering a few questions and getting a personal quote online, you can secure life insurance much more quickly than you might by working with a professional on a more complicated and expensive policy. In fact, when you find an attractive quote with a strong death benefit, you can apply and receive insurance on the same day with some companies and brokers.
Beyond this, you are free to take your time deciding which policy is best for you (and your spouse, for example) by avoiding the hassle and pressure of a third-party. Without unwanted phone calls and urgent offers, you don’t have to be in any rush to sign a contract immediately—unless you want quick coverage today. Go at your own speed, and keep the convenience to choose on your schedule.
Clear Quotes and Fixed Premiums
It may not always be transparent with complicated policies what you’re actually signing up for.
Rather than a vague estimate, direct term gives customers getting quotes a greater sense of confidence. Your quote will be customized to you, your ideal benefit amount, and the factors that affect premiums like age, gender, health, and more. Of course, if they require a medical exam, findings might change this rate, but the direct and online quoting process tends to be quite accurate.
Easy-But-Optional Guidance from Insurers
Applicants who already know the details they want and need out of life insurance won’t endure the explanations, advice, and suggestions of a third-party. They can speed through the process, selecting their 20-year term and $500,000 benefit in minutes or hours rather than days or weeks of deliberation.
But, even if the direct term life insurance shopper has a few questions or uncertainties, there are often online calculators, questionnaires, and resources to guide them. They can determine the best length of coverage and amount of benefits needed for their goals.
For the most part, Americans have specific reasons to choose life insurance by research from Statista. Life insurance helps to replace their salary, help their dependents, and transfer their wealth, and the consumer is empowered to make decisions as easily as possible with it.
No Obligations, Fewer Mistakes
When you seek quotes and shop for term insurance directly, there’s no need to explain yourself to another person. You won’t have to feel like an inconvenience, and you don’t get the sense that you have to sign through them in a short time—or at all. By taking the feelings out of a very logical, practical decision to get insurance, the direct experience makes more sense to a lot of people.
This way, you can get as many quotes as you like before you decide on the right coverage and unique premium for you. While each company surely seeks your business, you’re not obligated to buy in, and that means you’ll likely make a better choice from all the different policy options available to you.
And, taking the human element out of the equation when you shop online has even more advantages. Algorithms, if nothing else, are highly accurate. Calculating the risk of an applicant against the possible policy amounts can be challenging work for third-parties tasked with many different applicants who have unique situations and desires for coverage.
The instant calculations and statistical analysis of an evolving algorithm become more accurate with every applicant and set of data. This might not be true of human reviewers of your application. If they are just as good at getting you the optimal policy, they will surely not offer the same efficiency, slowing your application.
Less Commitment and Cost than Permanent Plans
Permanent life insurance works just as it sounds. To secure benefits that are sure to pay out while you pay premiums for the rest of your life—permanent insurance demands a large and lasting contractual commitment that some are unwilling to make. Life brings uncertainty, and, though everyone wants to be prepared for the unexpected, these “whole life” insurance agreements give them pause.
Term life insurance contrasts with permanent policies by covering only the most essential years in a person’s life and by having no financial or investment features. When you’re buying property, paying for education, or still working and providing—life insurance with lower premiums can make more sense (even without dividends or cash value). See our table below to compare these plans further.
Working with Direct Term Life Insurance
Buying direct term life insurance right from the carrier works very simply. You can use an accurate, online tool to get quotes from one or multiple insurance companies, experimenting with different coverage options that meet your expectations. Once you find a company and policy profile you like, you can apply with answers to background and health questions.
After a review of your information and health records (unless those are waived), the carrier will offer a policy to you if you’re insurable. Then, it’s up to you to buy. Each company will set terms and explain conditions, but term life always has a year-defined and benefit-guaranteed structure. For the monthly fee, your beneficiaries receive the benefit amount in the event of your death. Just like any other, that’s how direct term life insurance works.
Pay attention to the fine print because, with some policies, you can get your premiums back if you outlive your policy of 20 or 30 years. While this “return of premium” rider option tends to make your life insurance more expensive, some like to have it so they don’t feel like they wasted money in the end.
If you’re interested, the return of your premiums is tax-free and can help you save money along the way. Unfortunately, these policies will usually cost 100% more than regular term insurance, and no term insurance generates interest, so the potential return won’t keep up with inflation.
Shop for Term Life Insurance through Sproutt
Direct term life insurance makes the market and pricing of insurance more competitive for consumers says the University of Chicago Press because it helps them shop online. Through endless quote comparison, life insurance seekers are no longer limited to agencies and third-parties that have made shopping for insurance more difficult, slow, and uncomfortable.
If you want to enjoy an easy-yet-accurate experience of buying term life insurance directly, try Sproutt. You’ll see how our constantly evolving tool for quoting term, permanent, and no-exam policies helps to quickly find your ideal insurance.