Replacing Employer-Sponsored Life Insurance with Wells Fargo

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By James Tobin, CFP®

Critical Takeaways

  • Wells Fargo Doesn't Offer Proprietary Life Insurance Products
  • Limited Life Insurance Options Brokered Through Wells Fargo  Advisors Relationship
  • Limited Experience With Impaired Risk Cases

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Please note the Workers Bequest is not in any way affiliated with Wells Fargo or Wells Fargo Advisors. This article is our personal review of the term life insurance product offered through Wells Fargo  as well as alternatives. If you are looking to contact Wells Fargo Advisors  directly, call them at 1-866-224-5708 . If you are looking for a lost policy, contact the NAIC policy locator service  for help.

Expert Review Of  Wells Fargo Life Insurance

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Reviewed by

Jim Tobin, CFP®

Why you can trust this review

At Workers Bequest, we value our editorial independence. We keep our reviews strictly factual so you can use them to make informed decisions. Life insurance carriers referred to on this site do not approve reviews. 

Expert Review Of  Wells Fargo Life Insurance

Jim Tobin promo

Reviewed by

Jim Tobin, CFP®

Why you can have confidence in review

At Workers Bequest, we value our editorial independence. We keep our reviews strictly factual so you can use them to make informed decisions. Life insurance carriers referred to on this site do not approve reviews. 

If you have been considering buying a life insurance policy from your local Wells Fargo branch and wanted to do some research first, you have landed in the right spot. This Review will address, product offerings and alternatives, as well as advice on how to get the best deal possible on life insurance.

Review Of Wells Fargo Life Insurance History

Wells Fargo, one of the major "money center" banks in the United States, has recently come under fire for a "fake account" scandal. Before the management problems becoming public, the bank's reputation had been one of good management with a broad product line.

Recently, Wells Fargo suspended life insurance sales and now only offers insurance services through its investment arm Well Fargo Advisors.   That is to say. Wells Fargo offers no proprietary life insurance products.

So, in short, you are not currently able to purchase a life insurance policy through Wells Fargo unless you maintain securities account with Wells Fargo Advisors.

One of the products offered was life insurance. Wells Fargo offered simplified issue term policies through Prudential and traditional term policies through an affiliated agency.

This prompts the question, "should you ever use your bank to purchase life insurance?", and the answer is probably not. The reasons for this conclusion are detailed below.  

Should You Buy Life Insurance From Wells Fargo advisors Or Any Bank?

Although my answers risk sounding (and being) self-serving, they are also demonstrably true, as will be shown in the case study later in this article. 

1. Service

I'm not talking about how friendly or neat the Wells Fargo personal banker is, or if he offers you tea with lemon, I'm referring to policy service. Your term policy will be in force for 10-30 years, and in that time, you may change beneficiaries, addresses, or activate a policy rider. Do you think that the personal banker will still be there? Or do you think you will be given a 1-800 number and some bad music for an indeterminate amount of time?

Unlike the 26-year-old personal banker, life insurance is not a stepping stone for experienced independent agents. Rather, it's our life. We are interested, even eager, to do service work because that is how we earn referrals.

2. Laser Focus

Experienced life insurance agents generally don't do anything else. There are exceptions, usually agents who cross-sell Disability, long term care & medicare supplemental insurance.

However, there is no time spent opening checking accounts, selling mutual funds, and playing corporate politics. This allows the best agents to find you the best deal for your unique situation.

Finding the best deal for your unique situation is sometimes but not usually as easy as using the free quote tool. This is because different insurance carriers have different appetites for specific risks.

3. Choice of Carrier

Banks like Wells Fargo (when the sold insurance) and huge agencies like Select Quote and Zander offer the best deal among the carriers they carry. This is no different than most independent agents, accept they have fewer companies from which to choose.

The reason for this is simple, they negotiate the highest commissions in the industry because they do big volume business. In order to maintain the volume requirements for specific carriers, they must limit the number of carriers. This is sound business for them, but it limits your ability to find the carrier that best fits your unique situation. In short their business model has no use for niche carriers.

Experienced Independent Agents

Experienced independent life insurance agents have the niche carriers available, and they understand the underwriting guidelines.

If you are in perfect health, knowing the guidelines shouldn't matter because you will be preferred plus everywhere. In this case, you really can just use the quote tool. However, if you have a health condition, having an agent that knows the underwriting guidelines at various carriers is the key to finding the best deal possible for your specific situation.

Experienced agents will also be better able to talk intelligently about the cost-benefit of available riders. These include accelerated benefit riders, child riders, and waiver of premium riders

Example Of Using An Experienced Independent Agent Rather Than Wells Fargo Life Insurance Personal Banker

For example, Prudential may have more of an appetite for the risk that says Crohn's Disease presents than say Banner Life. In this case, the underwriting grade will reflect this increased appetite.

So, if your personal banker only represented one carrier and you found out later that you could have gotten a rate 50% or 60% better, how would you feel?

You'd probably be peeved either at the banker or yourself or both. So it's important that your Agent represent multiple carriers.

In fact, a good independent agent will have access to over 50 carriers. This ensures the best chance at a good rate.

Case Study: Pricing Life Insurance With Grave's Disease

Please see the case study below. it will show why it is in your interest to have as many options as possible available when shopping for life insurance with Grave's disease or any other impairment.

  • Gender: Female Age: 29
  • $1000000 20 Year Term
  • Tobacco: No
  • Well-controlled mild Grave's Disease. Diagnosed Age 28
  • Iodine only No Other Health Concerns

This looks like a best-case scenario that would be either Preferred, Standard Plus, or Standard depending on the insurer's appetite for a Graves disease risk.. Let's take a look at the rates.

  • Preferred 
  • standard plus 
  • standard 

This table, which shows only a few of the major life insurance companies available, illustrates the difference in rates. For Preferred rates, Prudential is 29% more expensive than SBLI.

On its face, this seems like a pretty straight forward choice, and if underwriting grades between carriers is the same, it really can be that simple. This kind of easy price shopping is particularly useful for younger folks in good health and demonstrates why you want to use an independent Agent.

For people who suffer from Grave's or any other serious diagnosis, it gets much more complicated.

Because life insurers manage their appetite for specific risks by being more lenient or more stringent with underwriting grades, you need to know which company will grade you a preferred risk and which ones will grade you as Standard (or worse).

In the case above, because the Grave's is well controlled and the applicant is in excellent health, Prudential (the most expensive standard rate) is not a factor. However, if her health was not quite as good as this example, Pru would likely be among the best deals because of more lenient underwriting.

That is if the more competitively priced carriers dropped her rating to standard or standard plus, Prudential would likely be the best deal because they might still rate her as P+.

This is something you can't know by simply looking at the lowest price. In the alternate scenario, using an independent agent could save you 17% (the difference between Prudential @ preferred and AIG @ Standard).

Your Next Step

We are glad about the efforts you've made on checking out for a better upgrade for your Employer Sponsored Life Insurance Plan and finally decided on Workers Bequest. We are committed to a totally transparent process (we'll even share our computer screen with you if you'd like), and making the application process as painless as possible.

Simply give us a call or send us an email so we can get you started. If you have any questions, We'd also like to hear them.

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