MetLife and Wal-Mart are setting up a pilot program to sell life insurance in Wal-Mart stores. The test program will take place in about 200 Wal-Mart stores in Georgia and South Carolina.
Individuals will be able to buy one year life insurance “cards” at the store, which need to be taken home and activated. The way to activate them is by calling MetLife and answering some health questions. If the account is approved, the policy will be for a term of one year. If the policy is not approved based on the answers to the questionnaire, then the policy can be returned to any Wal-Mart store for a full refund.
The cost is broken down by age group. For example, people between 18 and 44 can buy a one year policy that has a face value of $10,000 for $69, while a person between 60 and 65 can buy a one year policy with a coverage amount of $25,000 for $429.
There has been a push in life insurance sales, especially by MetLife, to cut out the middle person in the transaction and do more direct to consumer selling, similar to what GEICO and Esurance currently do with auto insurance. By cutting out the sales agent, insurance companies stand to make a lot more, since they can charge the same prices without paying a commission.
It will be interesting to see if this pilot takes off. Insurance is a complicated manner, and trying to sell one year al la carte plans may be an uphill battle. Depending on an individual’s age, they may get a much better deal actually obtaining a full term policy, depending on their financial needs.
Where this could be a good idea is someone looking to cover funeral costs for their family. That being said, $400 a year can add up very quickly when you are talking about buying a new one year policy every year once you hit 60.