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Make your Own Choices with No-Load Insurance

What is "No Load Term Life Insurance"?
If you have searched for life insurance and have received offers through the mail with applications that require few or no medical questions, you have seen No Load (NL) Life Insurance. For the most part, it means you are purchasing the insurance without the assistance of an agent. In some situations, however, you may have an agent who could simply hand you a bill for his or her commission. In such cases, the commission is not factored into the life insurance premium, so you will just be paying the cost of insurance plus annual fees which are simply the overhead costs of doing business.
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When you compare no load insurance term life with agented policies, you may discover that it doesn't always save money. Since the company does have agents to pay, they sometimes charge a higher cost of insurance which amounts to similar premiums to agented policies. The primary advantage to you is that a NL policy such as a whole life or universal policy may build cash sooner. Term policies have no cash value in any case. In the long run, however, the primary benefit of NL is to the company in the cost savings in advertising and commissions while retaining the ability to make a higher profit.

In some places you can purchase NL insurance through an insurance advisor, in which case it is really “low load” rather than no load. This person will still be a licensed insurance agent in most states, but instead of earning his commission through the company, he will be paid directly by you. The agent cannot simply charge anything he wants, but will give you a fee schedule based on the type of policy that was written and the expected amount of work.  In such cases the policy fees may be lower and the agent’s commission is not included in any company fees. Don’t assume that a policy is NL, however. Some companies offer both, so to get a true NL policy, you need to ask.

What to watch for in NL policies
A NL policy can be good if you are in a hurry and money is tight. If it is a Term policy, the company will give you an opportunity to convert it to whole life later on. The primary caution is to read your policy carefully. Most NL, specifically unagented policies, are either graded benefit, modified whole life, or Term. These options are legal and can work fine as long as you make sure you know what you are getting.

How Do I Apply for NL Life Insurance?
At one time it was difficult to find a NL life insurance company, but today they are quite common. A person who has gone on line looking for insurance is likely to get more offers through the mail than he knows what to do with as long as it is legal to sell such policies in your state. Medical underwriting will still apply, and you may even have to undergo an onsite physical.

Advisor written NL policies are somewhat harder to locate and are not approved in all states. If you find one, you will have the advisor fee either built into the first few months of payment or possibly billed separately. It’s a good idea to compare a NL policy by getting a quote for a traditional policy of the same type so you can see if you are actually saving money. If the difference is small, you may feel that having an agent who can explain the company procedures, policy terms and help you make sure the policy you purchase is appropriate for you and your family is worth a few dollars more.
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