You have got to hand it to GEICO. GEICO has grown into a household name for auto insurance in the United States. They have built an incredible brand through their entertaining advertisements over the years. I mean who does not love the GEICO Geko? Personally, I liked the GEICO cavemen the most.
However, we review life insurance companies, not auto insurance companies. That said, does GEICO deliver the goods on the life side? The inside scoop is that GEICO has not directly offered life insurance since the 1980s.
Yep, you heard correctly. GEICO sold their life insurance division a long time ago, and GEICO now outsources their life insurance business, which makes it difficult to write a GEICO life insurance review. Nevertheless, we will give you a deep dive into GEICO’s life insurance process and let you decide how you want to purchase your life insurance.
Our GEICO life insurance review will cover a quick history of GEICO and their life insurance, the GEICO process for purchasing life insurance coverage, and who exactly you will be dealing with to buy life insurance if you go through GEICO.
GEICO Company History
The Government Employees Insurance Company (GEICO) was founded in 1936 when Leo Goodwin Sr. and his wife Lillian Goodwin started to provide auto insurance to federal government employees and their families. Goodwin got his start in the insurance industry with USAA Insurance, an insurance company that specializes with the US military and their families.
While GEICO had its humble beginning service the hard-working men and women of the federal government, it quickly grew beyond government employees in scope. In 1974, GEICO began to offer insurance general public. Even before GEICO offered auto insurance to the general public, they were the 5th largest auto insurance company in the United States, which give you an idea of the size of the U.S. Federal Government.
Unfortunately, GEICO expanded too rapidly during the 1973-75 recession and reported a $126.5 million loss. A group of 45 insurance companies agreed to take on over 25% of GEICO’s policies as GEICO raised capital to pay claims.
GEICO also offers homeowners and other types of property and casualty insurance in addition to their auto insurance. GEICO even offered life insurance directly through a sister insurance company called the Government Employees Life Insurance Company (GELICO) from 1975 to 1985 before selling their life insurance business to Legal and General.
In 1996, GEICO was acquired by Berkshire Hathaway after being a publicly traded company since the 70s. Today, GEICO deals directly with consumers via the phone and internet with a small local agent presence. GEICO is the second-largest provider of private auto insurance in the entire United States.
GEICO Insurance Credit Ratings and Financial Strength
While GEICO had financial troubles in the 70s, it has long since been on the road to recovery. Today GEICO is on a rock-solid footing financially. A.M. Best has awarded GEICO an A++ (Superior) rating, which is the highest financially rating A.M. Best gives out.
However, since GEICO does not directly offer life insurance, its financial strength rating has no impact on your coverage. Instead, you should focus on the financials of the life insurance company that you ultimately select to provide death benefit protection to your loved ones.
The good news is that most of the life insurance companies that Life Quote brokers, if not all, are “a companies” or investment grade. Unlike car insurance claims that happen more frequently and for usually smaller amounts, life insurance death benefits can be for large sums decades into the future. You want to feel confident that your life insurance company will be there to make good on their promises when the time comes.
How does GEICO “offer” life insurance?
To the consumer, insurance is insurance. While insurance may seem like a commodity, the truth is that the insurance market is very broad. The skill set it takes to provide quality affordable auto and home insurance is vastly different than what it takes to provide life and health insurance. As a result, most insurance companies tend to focus on one or the other.
To GEICO’s credit, they understand this. Rather than put their brand on something that was outside of their area of expertise, GEICO decided to outsource the operation to an organization called Life Quotes.
Life Quotes is a third-party insurance brokerage that is not affiliated with GEICO outside of a referral agreement. Life Quotes has been around since the 1980s, which is an impressive timeline for an insurance agency.
Life Quotes also offers a wide selection of top life insurance companies in the United States. You will see names that you are familiar with. Of course, most independent life insurance brokerages represent the same companies for the most part, so this is not a differentiating feature.
In our opinion, passing off their life insurance business to a call center fits in with the way GEICO likes to do business. GEICO’s auto insurance call centers handle large volumes of their clients and referring the life insurance business to another call center that can manage the large number of inquiries that GEICO generates might be what’s “best for business” but is it what’s best for you?
One problem with life insurance call centers is that they suffer from high turnover. Learning field underwriting for one life insurance company is not a quick or easy process let alone 50 plus life insurance companies We often win deals from inexperienced call center agents that make rookie mistakes with carrier choices.
Life insurance underwriting is an art and a science. We know the ins and outs of placing cases with pre-existing medical conditions and specialize in no-exam underwriting with years of experience and individually placed hundreds of life insurance policies to back that claim up. Can a call center agent say the same?
Additionally, gents are under pressure to meet their sales quotas, which can affect the level of customer service they provide. Everyone understands the importance of life insurance, but no one likes high-pressured sales tactics. As an independent agent, we have no sales quotas to meet, and we pride ourselves on providing you with affordable life insurance.
Is GEICO life insurance worth it?
If you are the type of person that likes working with call centers than GEICO life insurance is an excellent option for you. We have never worked with someone who actually wanted to work with a call center, but if that is your preference, we will understand.
I am a consumer just like you. I have purchased my auto insurance over the phone before, and it was a pretty straightforward process. In fact, I am a little jealous of the property and casualty tele-agents that is how painless it was.
It was a brief phone call. The agent took my information, compared rates, and bound my coverage on the spot within a few minutes. If only applying for life insurance was that fast and easy.
Unless you qualify for a no-exam life insurance policy, the process of purchasing life insurance can be 4-8 week journey. Do you really want to work with a call center for 4-8 weeks coordinating exams and listening to elevator music while you wait for an update on your underwriting?
Call centers can make clients feel like they are just another call. By working with a digital independent life insurance agent, you get all the advantages and conveniences of a corporate life insurance call center, with the touch of your local insurance agent. When you consider that life insurance rates are regulated at the state level, why would you not choose to work with an agency that is going to provide you with superior customer service?
Final Thoughts: Is GEICO Life Insurance Good or Bad?
The auto insurance world is an entirely different beast unto itself compared to life insurance. It seems like we field calls constantly from people who purchase their life insurance from their auto insurance company only to see their rates get increased or even worse a decline.
That is fine with us as we are more than happy to place to save clients money and get them covered. GEICO recognized that it is better to be the master of something than average at everything when they sold their life insurance division long ago.
GEICO’s referral partner Life Quote is basically a life insurance call center. Life Quote will broker all the big names in the life insurance industry, but call centers have a hard time delivering that personalized service that an independent agent can in our experience.
If you are looking to contact GEICO, you can find them on the web or at the GEICO phone number 1-800-207-7847. Once you get through all the prompts, you might be able to get someone to transfer you to the life insurance department.
If you are looking for quality affordable life insurance, let our agency take a shot at saving you money on your coverage. You can request a quote on our website or give us a call. What do you have to lose?
Joe is a lifelong learner with a passion for sharing what he has learned with others. Joe has publicly spoken on life insurance in the past to both colleagues at industry conferences and to consumers in educational settings and as a contributor to industry blogs. Additionally, Joe is studying for certifications such as the CFP, CLU, and RICP to further his professional knowledge.