I compare the top term life insurance quote sites on four criteria -- quote accuracy, carrier selection, customer support, and ease of use. InsuranceGuide easily attains top honors on the basis of quote accuracy and strong carrier selection. Quotesmith takes second place, mostly because of strong carrier selection. For the details, click here.

1. InsuranceGuide (7.8)
2. Quotesmith (7.0)
3. InsWeb (5.9)
4. QuickQuote (5.8)
5. Term4Sale (4.5)
6. Reliaquote (4.5)
7. AccuQuote (4.0)

The two most important criteria (the criteria which will lead term life insurance buyers to the policy that is best for them) are: 

(1) Quoting accuracy

(2) Carrier selection

Quoting accuracy is the degree that term life insurance quotes are geared to your actual risk profile. But accurate term life insurance quotes without carrier selection (i.e.., a number of competitive term life insurance companies) will still leave you wondering if there isn't a significantly better term life insurance policy for you out there.

Other important criteria are:

(3) Customer support, including misquote handling

We rated support before the sale (live help), as well as support after the sale (misquote handling). Even with the most accurate quoting systems, misquotes occur (because you often don't know your cholesterol level or ratio, or any number of other exam results in advance -- what a backward system!)

If you end up not qualifying for the rate you were initially quoted, and discover a better rate with another company (by rerunning a quote armed with your exam results), you will want to be sure that you don't have to start all over with a new agent. This is a good reason to work with a broker who works with many companies, rather than an agent that only represents a few.

4) Ease of use

Don't be misled by quote systems that only ask age, sex, and smoker status before quoting you. The fact is, a lot of risk variables are considered by companies, and if you are serious about buying a policy, then you may as well answer the most important health questions up front (and get as accurate a quote as possible). Nevertheless, a great tool is of limited use if it is too difficult or irritating to use; so, ease of use is important as well.

The above four criteria are the ones I focused on when comparing the quoting sites that are referenced most often in the media -- InsWeb, QuickQuote, Quotesmith, Term4Sale, Reliaquote, and AccuQuote. These sites have all been chosen as "picks" within the past three months by the following media organizations:

Money/CNN, "Shopping For Term Life on the Web," October 23, 2001.
Forbes, "Best of the Web," September 10, 2001.
Consumer Federation of America, "Term Life Insurance on the Internet: an Evaluation of On-Line-Quotes," August 1, 2001.

I also evaluate InsuranceGuide, a project that I have sponsored to focus attention on these consumer-empowering criteria. The charter for InsuranceGuide is to lead the paradigm shift required to empower consumers buying term life insurance. To that end, we will always be looking to incorporate new technologies and processes that further this cause. If you have a suggestion in this regard, please contact the author.

Rather than inundate the reader with a detailed discussion of the myriad underwriting variables that are evaluated when classifying risk, I'm going to confine myself to the 5 variables that come into play most often, for term buyers who are standard or better. These variables are:

(1) Build (Height/weight)
(2) Cholesterol (Level/ratio; medication)
(3) Blood Pressure (systolic/diastolic; meds)
(4) Family History
(5) Driving record

Of the sites evaluated, only InsuranceGuide, QuickQuote and InsWeb incorporate software to provide accurate quotes. If the other sites included manual guidelines, we gave them partial credit.

No current online quote system works well for substandard or impaired risk cases (even impaired risks like asthma or controlled diabetes that are standard in many cases). A lot of the questions that the three accurate quoting sites ask are geared to filtering out cases that require individual attention (each has a long list of impairments from epilepsy to hypertension, none of which I will discuss).

BUILD

All three sites include build (height/weight) in their calculations, so there is nothing to compare. However, it is worth noting that 15% of all misquotes are a result of incorrectly entered height/weight information. Many people underestimate their weight -- what matters here, as with all exam results, is what the paramedical examiner and laboratory say. This is a very important point in my larger enterprise, because it calls attention to the great value of allowing life insurance applicants to be examined BEFORE they get quoted. This is the ONLY way to assure that they are selecting the right company and policy for their risk profile.

CHOLESTEROL

Cholesterol is the risk factor that causes 37% of all misquotes (according to one medium-scale study.) Clearly getting this risk factor right is very important for accurate quoting. Getting the cholesterol factor right means asking about cholesterol level, cholesterol ratio and about treatment and diagnosis.

QuickQuote asks only about cholesterol level, ignoring cholesterol ratio. This leads to misquoting on the high side by not finding the much lower rates offered by certain carriers for low cholesterol ratio.

Since our last study, InsWeb has improved their software to ask about cholesterol ratio. Unfortunately, they still don't provide the consumer with the lowest quotes because of their limited carrier selection.

InsuranceGuide asks all the relevant questions on cholesterol -- level, ratio, and treatment/diagnosis. Additionally, it includes carriers (Transamerica, First Penn-Pacific, Empire General) who take advantage of this by offering low rates for low cholesterol ratio.


BLOOD PRESSURE

All three accurate quoting sites handle blood pressure well, asking about treatment/diagnosis and allowing exact systolic/diastolic numbers to be input from the main health menu.

FAMILY HISTORY and DRIVING RECORD

All three accurate quoting sites address these, but they do not handle them equally well. Any evaluation of each site's treatment is a bit difficult to communicate without going into cumbersome detail. Suffice it to say that companies treat these items rather differently, and InsuranceGuide does the best job at covering the terrain.

Here are two examples. First, companies use different age cut points in family history (60 is most common, but 50 and 70 are also used). It is important to cover each cut point. Secondly, moving violations are analyzed over different time periods (1, 2, 3 years) and with different limits (1, 2 or 3 violations in the time period). Again, a truly accurate quoting system needs to account for all these differences if the system is going to present the consumer with the lowest possible rate.

These fine points aside, both InsuranceGuide and InsWeb scored equally high for ACCURACY. The details can be found here.

Any attempt to list the fifteen most competitive term companies is going to be challenged. Here is my clearly imperfect (but unbiased) list (in alphabetical order), followed by a brief discussion of how I derived the list.

1. Americom
2. Ameritas
3. Banner Life
4. Cincinnati Life
5. CNA/Valley Forge
6. Clarica Life
7. First Penn-Pacific
8. John Hancock
9. MONY
10. North American
11. Ohio National
12. Pruco
13. Security-Connecticut/Reliastar
14. West Coast
15. Zurich Kemper

Now for my selection criteria. I used Term4sale.com to derive my top 15 list. It is the most unbiased, comprehensive online quote site (Bob Barney doesn't sell policies OR leads).

While an accurate top fifteen would run a comprehensive sample of actual risk profiles through an accurate quote engine which had all companies, no such quote system exists. And since criteria for standard classes vary widely, the only meaningful way to derive top carriers was to stick to the top two classes, "preferred plus" and "preferred". I realize that this is flawed -- I miss several companies that are very competitive for some risk profiles. But at the same time, it is unbiased and covers over 80% of the expected use.

Anyway, the demographic cells were as follows:
Male and female (equal representation)
Nonsmoker classes only (over 80% of use)
Ages 35, 45, 55
Duration 10 and 20 years
Face amount: $500,000

I assigned scores of 5, 4, 3, 2, and 1 to the top 5 rankings in each cell.

Term4Sale takes top honors here, hands down. Nevertheless, this is a one-dimensional site, and its other shortcomings put it near the bottom of the list in terms of a comprehensive consumer site for buying term life insurance. InsuranceGuide and Quotesmith also do very well here, and in enough other categories to give them first and second place honors. Again, you can see the details here.

If a term buyer ends up discovering for the first time that he or she has a high cholesterol level, and can qualify for a better rate with a different company, a site with small carrier selection will not be able to handle the switch smoothly. As a result, sites with broad carrier selection get a free scoring boost in this category.

InsWeb also does not handle this issue smoothly. That's because they are not a full-service broker: their relationships are primarily with direct fulfillment centers tied to specific companies.

Live help at the Website was also a consideration here. Term4Sale does not provide it, and InsWeb's "Live Help" feature only allowed for email input. Overall, Quotesmith won this category, with the difference being potential misquote handling because of their large carrier selection. Here are the details.

Because InsWeb and QuickQuote invoke more graphics, it takes 3 times as long to get a quote (on a 56Kb modem) as compared to all other sites except AccuQuote. AccuQuote loses the race here, as can be seen by the page which comes up while waiting for quotes: "Your quote should appear in about 15 seconds..."

InsWeb requires the consumer to wade through 4 pages of questions to get to the quotes. Both AccuQuote and InsWeb are fortunate that this category only counted for 10%! Four sites share top honors here. (Honestly, this stuff is not that hard!) Here are the details.

No informed person doubts any longer that the internet will revolutionize the way we do business. Nowhere is this more true than in the delivery of term life insurance.

In the not too distant future, term buyers will take their exam first, and then run the results through the full blown expert underwriting modules of numerous carriers. In a sense, they will bid their risk profiles out to competitive term companies, and choose from the offers that are returned. Such online customer empowerment is already being implemented for other financial services (eg., mortgage loans and automobile insurance).

But other financial services don't require a fundamental paradigm shift -- to empower term buyers, companies must relinquish significant control over the underwriting process, and they will do so only when it becomes economically infeasible to cling any longer to an obsolete system. Hopefully, that day is not far off.

The author will continue to push for the pardigm shifts required to truly empower buyers of term life insurance. Our project at InsuranceGuide will continue to function as a laboratory for pushing this envelope. Any reader who has a suggestion in this regard is invited to contact the author.