What Is Direct Term Life Insurance?

Updated · May 20, 2022

The insurance application process can be a drag.

But if you know what you want, you can shorten it.


You can buy different types of life insurance directly from the insurance provider.

In our guide below, we focus on term insurance.

Read on to find out what direct term life insurance is, whether it’s the right option for you, and how to get it.

What Is Direct Term Life Insurance?

Direct term life insurance is a type of direct purchase insurance (DPI). This option is suitable for individuals who don’t need financial advice.

If you know what type of insurance you need, you can purchase it directly from the insurance company.

Typically, you can buy the following DPI products:

    • Term life insurance policy, usually with total and permanent disability (TPD) cover
    • Whole life insurance, usually with TPD cover
  • Optional critical illness rider

So, a direct term policy is an insurance with coverage for a set period of time that you can buy without an intermediary.

How Does Direct Term Life Insurance Work?

To understand how the direct term life policy works, we need to examine its fundamental parts.

First, we discuss how you can buy insurance directly from the provider. Then, we continue with the term insurance definition.

How Does Direct Purchase Insurance Work?

The standard insurance application process is the following:

  • First, you do your research to determine what type of policy you need.
  • Next, you consult an agent or a broker who will negotiate the terms with the insurance company.
  • You fill out tons of forms and wait to see if you qualify.
  • The policy becomes valid after all medical checks are complete.

A direct purchase saves you the second step—going through an agent.  Instead, you can compare the rates and terms of different companies online.

Next, you can get a quote from direct insurance companies online. This will save you time and spare you the tiresome paperwork.

Lastly, the plans usually start immediately. Some providers allow you to delay the medical exam. Others don’t even require one.

How Does Term Life Insurance Work?

The term of this type of life insurance is usually 10 to 30 years. If anything happens to you during the insurance term, your family receives a cash payout.

They can use it to cover end-of-life expenses, your outstanding debt, or to support the family income.

Term life insurance is the most affordable policy available. Its premiums are cheaper than those of permanent insurance.

That said, it doesn’t have a cash value, but only a death benefit.

What Are the Benefits of Direct Term Life Insurance?

  • Customizable—You can customize the policy to your needs. Direct insurance providers offer protection for everything from accidental death to major illness. You can also choose the size of the death benefit and the premiums.
  • Low premiums—Being a term life policy, this type of direct insurance covers a set period of time. This means that the premiums are lower than for permanent life insurance.
  • Fast and convenient—You can buy online or by phone. This makes the application process faster. You don't have to wait for an appointment with an agent or go through tons of paperwork. You just answer a few questions, and you get a quote.

If you're approved, you might even get the insurance that same day. Some companies and brokers don't require a medical exam, so the approval process is also faster.

Term vs. Whole Life Insurance

As we mentioned, you can buy different types of insurance directly from the provider. So, make sure you know which one you want before you contact the insurance company.

Start by comparing term life vs. whole life insurance. Then, narrow down your choice to the specific type, benefits, and riders you want.

Let’s start with the basics.

Term life insurance means that you get coverage for a set amount of time. In contrast, whole life insurance covers your entire life span.

Additionally, term premiums are cheaper than those of permanent life insurance. Term life insurance rates can be as much as 25 times higher than whole life policy rates.

However, term policies lack some of the benefits that whole life insurance offers.

With both options, you get tax-deferred death benefits.

But with whole life insurance vs. term policy, you also accumulate a tax-deferred cash value. You can use it to borrow money or increase your death benefit.

Which Type of Insurance Is Right for You?

Ultimately, your choice in the whole life vs. term life insurance comparison will depend on your budget and needs.

If you are looking for a quick, flexible, and affordable way to protect yourself during a temporary risk, direct term insurance is an excellent choice.

If you want permanent protection and have the budget for it, consider whole life insurance.

Whether you opt for a term or permanent insurance, though, it is important to compare rates and find the best conditions.

Wrap Up

Direct life insurance offers coverage for a set period of time. You can buy it directly from the insurance company without an intermediary.

If you're looking for a convenient and fast solution, it might be the right choice for you.

But it's not without its drawbacks.

In our guide above, we explain what direct term life insurance is and what are its pros and cons.

Read it to see if it fits your needs.

Aleksandra Yosifova
Aleksandra Yosifova

With an eye for research, Aleksandra is determined to always get to the bottom of things. If there’s a glitch in the system, she’ll find it and make sure you know about it.