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Accepting A Preemptive Offer vs. Listing On The Open Market

When you decide to sell a house, you might encounter a preemptive offer—a bid that arrives before you list publicly on the open market or reach your set offer due date. This scenario often unfolds in a robust market or when your property is highly sought after.

It’s a tempting yet tricky situation: Do you accept the early offer or cast a wider net and hold out for something better? You see this dilemma play out in professional sports all the time. Some players bet on themselves and reject guaranteed life-changing money for hopefully more. But it doesn’t always work out as.

This article dives into that decision, drawing from my own experience, to help you weigh your options. Ultimately, your goal is to sell your home for the highest price possible at the time with the least amount of headaches.

Table of Contents

My Journey: Opting for a Preemptive Offer

In 2025, I made the call to sell my old house after renting it out for a year. I’d purchased a larger home a few years back and had an attachment to the old place.

But life was pulling me in too many directions: managing multiple rental properties, raising kids, writing on Financial Samurai, and finishing my USA TODAY bestseller, Millionaire Milestones. Selling the home to someone who’d love it as much as I did felt like the right move. Plus, renting out single-family homes at that price point wasn’t delivering an attractive-enough net rental yield.

Ultimately, I accepted a preemptive offer before listing on the Multiple Listing Service (MLS). It wasn’t an easy choice. The decision gnawed at me because I was dying to see how the house would fare in the open market.

Accept A Preemptive Offer Or List On The Open Market

Here’s the detailed thought process that led me to accept the preemptive offer, broken down into seven steps to help guide your own decision.

Frankly, to get the highest price, most sellers should list on the open market—but only if they have a competent agent, a solid marketing plan, and an attractive list price. Opening up your home for the world to see can backfire. The last thing you want to do is price too high and have your home sit for months.

Accepting a preemptive offer, like going the dual agency route when buying, may benefit more experienced sellers. However, even if you’ve sold multiple properties before, accepting a preemptive offer is gambling that might result in leaving money on the table.

Let me review the steps I took to decide on which route to take.

1. Choose a Top-Tier Agent To Increase Your Chances Of Getting A Preemptive Offer

Our first move was hiring a top agent—one ranking in the top 10% of our local market based on sales volume. Why? We wanted someone with a deep network, a stellar track record, and the ability to move a property fast. That expertise came at a cost: We paid a commission 0.25% higher than a competing mid-tier agent.

A key perk of going with a top-tier agent was their access to the Top Agent Network (TAN), a private group connecting elite realtors.

Our strategy hinged on leveraging TAN. Before exposing the house to the open market, we’d broadcast it to this exclusive network of over 500 of the top agents. It was a way to dip our toes in, testing demand without committing fully.

Here’s why that mattered: Once you list on the MLS, the clock starts ticking. Every day past two weeks on the market chips away at your final sales price as buyers start wondering what’s wrong with the place. By using TAN, we could market the property discreetly without starting the official clock.

Besides, the top 10% of agents handle 80–90% of all home sales in our area. That means you’re getting in front of the majority of serious buyers while avoiding most of the looky-loos and tire kickers.

If you’re aiming for a preemptive bid, I recommend partnering with a top-tier agent who’s plugged into TAN or a similar network. It’s like having an inside track before the race even starts.

2. Easier To Experiment With Pricing Strategy Off Market

Pricing a home is an art form, and there are three broad approaches:

List way below market to ignite intense demand and spark a bidding war.
List slightly under or at fair market value, functioning like a “buy now” price.
List above market, hoping to snag someone so enamored they overlook the premium.

With 22 years of buying and selling real estate under my belt, I believe pricing 5% to 10% below fair market value often works best. It’s a magnet for hopeful buyers, creating competition. If they fall in love—and many do—paying an extra 15% to 20% doesn’t feel like a stretch.

We toyed with listing our home at $1.99 million, roughly 15% below the $2.3 million I thought it could potentially fetch in a public sale. The goal? Draw a crowd and let the bids climb. But there’s a risk: Price too low, and some buyers balk at jumping far above asking.

So, we pivoted. We built a sleek website for the property—complete with photos, a virtual tour, and a story about its charm—and listed it on TAN at $2.095 million, 8.8% below that $2.3 million target. This softened the leap to $2.3 million compared to a $1.99 million start. However, it also filtered out buyers capped at $2 million, which reduces potential demand.

The result? A preemptive offer rolled in at $2.2 million—5.3% above our $2.095 million ask, and 10% above our initial though of listing the home for $1.99 million. It wasn’t the $2.3 million I’d dreamed of, but it proved the strategy had legs. The key was to get a legitimate offer and then negotiate upward in price.

Note: These numbers are illustrative, not my actual sale figures, to make the example concrete.

3. Negotiating To Push The Preemptive Offer Higher

Negotiation is where deals are won or lost, and a real estate love letter can tip the scales. If you’re selling, write a heartfelt note about what you adore about the house and why it’ll suit the buyer. If you’re buying, explain why it’s your dream home and you’re the perfect fit. These letters forge emotional connections—crucial in a numbers-driven game.

I’ve been writing online since 2009 and have three bestselling books to my name, so I know the power of words. As the seller, I crafted a seven-page love letter, pouring in everything: the home’s best features, my favorite memories, even my take on strong local economic trends. The buyers—a couple expecting their first child—responded with their own letter. As parents who’d upsized after our second kid, we instantly connected over that shared milestone.

Initial Offer And A Counter

Their initial offer was $2.15 million, 7.5% above asking, but below my $2.3 million goal. I countered at $2.36 million—9.7% higher—bundling it with a two-page letter thanking them, reinforcing our family bond, and justifying the price with market data.

They came back at $2.25 million a day later. Progress! It was so close to my reach target of $2.3 million, and I was tempted to accept. I had 24 hours to respond before deciding whether to go on the open market or not. During this time, I agonized in the hot tub whether it was worth pushing for one last counter or risk having the buyers balk and walk away.

The Final Counter

The next evening, while enjoying some tacos in Lake Tahoe after an epic day of skiing, I felt confident that the connection we’d built through our letters would keep the potential buyers engaged, even if I made one final counteroffer. More importantly, I knew I’d regret not at least asking.

So I responded through my agent with a “best and final” offer of $2.315 million, $15,000 above my original stretch price. Just 30 minutes later, my agent called: they had accepted. I ordered a margarita to celebrate.

Had they held firm at $2.25 million, I would’ve walked and gone to market. But $2.315 million nudged just past my $2.3 million goal, and that was enough to seal the deal.

Negotiation isn’t just about the numbers, it’s about creating a connection. That personal touch can be the tipping point when dollars alone won’t move the needle. Personally, I feel much better knowing I’m selling the home to someone who will truly benefit from it and appreciate it. If I had sensed the buyer was an investor just looking to flip it, their offer wouldn’t have carried the same weight.

4. Setting a Minimum Preemptive Offer Price

Before you skip the open market or forsake an offer deadline, establish your must-have price. If the preemptive offer doesn’t hit or exceed it, list publicly. It’s that simple. For me, that number was $2.3 million (sticking with the example). When the initial offer of $2.1 million came in, I was pleased to have a bid but not thrilled.

A skilled agent can steer negotiations, but ours was skeptical. She doubted we’d clear $2.2 million, let alone $2.3 million, estimating $1.95 million (only 6.6% above our 2020 purchase). She pegged 2020 as the market peak, but I vehemently disagreed and made me really question whether to hire her. I’d been deep in the 2020 trenches—touring homes, submitting offers, tracking comps. I had to figure out whether she was just managing expectations or really believed in her pricing thesis.

I knew values had continued to increase from 2020 until 2022, faded from 2022 until 2H 2023 after the Fed increased rates 11 times, then rebounded aggressively in Spring 2024. So, I took the reins, using my letters and pricing strategy to push us to $2.315 million.

If your agent doesn’t fight aggressively for you, you must do so yourself. Of course, you could also be wrong, and ultimately pay the price in terms of wasted time and selling for a lower price. Mine was a little surprised and dismissive about the initial 7-page letter I wrote, but I believed in my strategy. As a potential buyer, I want to know everything there is about the property, including what was fixed and upgraded.

Your minimum is your anchor. Set it thoughtfully, and don’t budge unless the offer aligns with your goals.

5. Analyzing Recent Comparable Sales

I didn’t pluck my aspirational selling price of $2.3 million out of thin air. It came from poring over comparable sales (comps) from the past year—homes sold, listed, and in escrow. The fresher the data, the better. The trickiest part? Estimating what homes still in escrow will close at, since agents guard those figures until the ink dries. An experienced agent with a strong reputation can pry out that intel, giving you an edge.

I learned a similar-sized home nearby fetched $2.45 million—well over asking. I loved my place more, but its location near the MUNI station in a trendier neighborhood close to everything added a premium to people who need or want to work forever or can’t work from home. With that comp drawing 12 offers, I figured mine could pull at least three and climb to $2.3 million.

Then came a curveball: A “hot home” comp—a full gut remodel—listed at $2 million on Redfin got zero offers the day after my $2.2 million bid arrived. Smaller, with inferior views, and less outdoor space, I’d expected it to sell for $2.1 million. Its flop rattled me. If it couldn’t fetch even one offer at its $2 million asking price after two weeks on the market as a “hot home” on Redfin, maybe it’d sell for $100,000 less. Doubt seeped in, and I trimmed my minimum threshold price from $2.35 million to $2.3 million.

Comps are your compass, but markets can shift fast. One of the greatest risks sellers have is being overly biased on how awesome they think their home is. Just like the ability to buy the dip requires removing emotion, so does selling a house for the maximum price.

6. Evaluating the Offer Beyond Price

Price grabs headlines, but an offer’s “cleanliness” can make or break its appeal. Beyond the dollar amount, you’ve got to scrutinize the closing timeline, contingencies, and any conditions tied to the purchase. These factors determine how likely the deal is to close—and how much stress you’ll endure along the way. Let’s break it down.

Most home sales close in 30 to 45 days, often saddled with contingencies: inspection (buyers can back out or demand repairs if issues arise), financing (the deal hinges on their loan approval), and even home insurance nowadays.

Some buyers toss in extra wrinkles, like needing to sell their current home first—a domino effect that can delay or derail everything. Each contingency is a potential snag, a thread that could unravel the sale.

The Near-Perfect Offer

The dream offer? All cash, no contingencies, and a lightning-fast close. Why? It’s as close to a sure thing as you get. No bank can deny a loan; no inspection can spook the buyer into renegotiating. Cash cuts the risk to near zero.

But there’s a catch: Cash buyers know their offer’s allure, so they often bid lower, banking on sellers prioritizing certainty over top dollar. You might face a dilemma—say, a $2.35 million financed offer with contingencies versus a $2.3 million cash offer that’s clean and quick. It’s a trade-off between maximizing profit and minimizing risk.

I’ve bought properties both ways—cash and loans—so I’m less dazzled by cash than some sellers. At closing, the money hits your account either way; whether it’s from the buyer’s pocket or a bank’s doesn’t change the outcome.

A financed offer with no financing contingency (meaning they waive the loan approval escape hatch) can rival cash’s reliability. Still, I get why sellers swoon for cash. There’s a psychological comfort in knowing no lender can meddle.

Then there’s the closing timeline. A short close—say, 10 or 15 days—slashes your carrying costs: property taxes, mortgage interest, or lost rental income. It also shrinks the window for disaster. Selling a house is nerve-wracking—contingencies amplify the anxiety.

During escrow, you may start imagining worst-case scenarios: a pipe bursts mid-escrow, or, the house burns down before closing, voiding the deal. The shorter the escrow, the less time you spend sweating those hypotheticals.

Hard To Pass Up Our Offer

Our offer was a beauty: all cash, no contingencies, and a 10-day close. After countering twice, I got to my aspirational sales target figure, so I accepted.

Was $2.315 the highest possible price? I’ll never know for sure. But its cleanliness tipped the scales. Speed and security outweighed the chance of squeezing out a bit more on the open market.

When evaluating your offer, don’t just chase the number. Weigh how “clean” it is against your tolerance for risk and delay. Anything, from a forest fire to a burst pipe could happen during escrow.

7. Counting Your Offers (Two Or More Is Ideal)

Ideally, you want a preemptive offer so good that are willing to forgo a multiple offer scenario if you list on the open market. Even better is receiving multiple preemptive offers, a rare scenario. It’s a seller’s dream, like an auction unfolding in your favor.

With just one preemptive offer, it’s much harder to decide. You have to analyze the probability the preemptive offer, a bird in the hand, will be higher with better terms than all other unknown offers in the future. You’re the one who has to create competition, stoking desire and fear of missing out (FOMO) to push the bidder higher. It’s a tougher game, requiring finesse, salesmanship, and maybe even a bit of bluffing.

We listed on TAN for a week, casting a wide net among top agents. I’d hoped for a flurry of interest—maybe two or three offers. But we got just one offer. A week’s a tight window; most buyers need more time to tour, crunch numbers, and commit. Still, that lone initial bid at $2.1 million gave us something to work with.

In Search For More Offers That Didn’t Come

With only 24 hours to respond, we didn’t sit idle. My agent sent a blast to TAN: “Offer incoming—any takers?” We hosted private showings for her top clients, hoping to drum up a rival bid. Unfortunately, nothing in writing materialized. The silence was deafening, especially with that “hot home” comp worrying me—it listed at $2.04 million and got zero offers despite its buzz.

Did I really want to roll the dice, spend at least two more weeks marketing the house on the open market, hope that strong offers would come in, and then cross my fingers that we chose the right one? Or did I want to go with the solid offer in hand and keep things simple? I chose the latter.

If you’re stuck with one offer, don’t despair. Use your agent’s network, signal urgency, and negotiate hard. But if you can’t spark a second bid, you’re betting on that lone horse—make sure it’s a winner. If you don’t like the preemptive offer, then test the open market instead.

Was It the Right Call To Accept A Preemptive?

Taking a preemptive offer leaves you wondering: What if I’d gone to market? Maybe a wild buyer with an inexperienced agent would’ve encouraged their client to pay way above market. I’ve seen it happen several times before.

Post-deal, I think I could’ve squeezed $20,000–$40,000 more, but I feared losing the deal entirely if I squeezed too hard. The fact of the matter is, you will always wonder whether you could have gotten more after you’ve agreed on a selling price. It’s just human nature.

My mission was simplifying life, and I did. I reached my stretch goal and reinvested the house sale proceeds into stocks, Treasury bonds, private AI companies, and private real estate.

Most Home Sellers Should List On The Open Market

In conclusion, unless you and your agent know your local market inside and out—and how to price correctly—listing your home on the open market is the safer bet. As long as you don’t botch the pricing or marketing, the open market is the best way to determine your home’s true market value. Even if you do mess things up, the market will ultimately dictate what your home is worth.

I’d only consider accepting a preemptive offer if:

You’re an experienced seller who knows the market inside and out
You have a strong network of real estate agents and buyers
You value privacy and discretion
The offer meets or exceeds your aspirational open market price
You have doubts about getting a better offer
You want to save time and reduce uncertainty

As I get older (and hopefully wealthier), I place a greater premium on simplicity. I told myself that if I could get at least a certain price, I’d sell—and I did. And remember, I’m a real estate fanatic who visits open houses every weekend for fun and market research.

Sure, making more money is always nice. But at this stage of life, a smooth transaction holds even more value. And who knows, had I passed on the preemptive offer, the buyers might have moved on and never submitted a bid once I went to market. I could have ended up with only one offer below what they initially proposed.

I’ll never know for sure. But what I do know is this: locking in a win at your aspirational price is never a loss.

Readers, have you ever accepted a preemptive offer when selling your house? If so, how did you determine whether the offer was good enough? On the flip side, have you ever made a preemptive offer to buy a house and felt you secured a better deal because of it? What other strategies should sellers and buyers consider to ensure they get the best possible outcome?

If you’re looking to invest in real estate passively, check out Fundrise—my preferred private real estate platform. Fundrise focuses on high-quality residential and industrial properties in the Sunbelt, where valuations are lower and yields are higher. After selling my house, I invested a portion of the proceeds in Fundrise.

Some commercial real estate valuations have dropped to levels near the 2008 financial crisis lows, despite today’s stronger economy and healthier household balance sheets. Seeing this as an opportunity, I’m dollar-cost averaging into the sector with my home-sale proceeds while prices remain attractive.

Commercial real estate prices and how much they declined in 2022 - 2024 compared to how much they declined during the Global Financial Crisis in 2008

Fundrise is a long-time sponsor of Financial Samurai and I’ve invested $300,000+ with them so far.

If you want to achieve financial freedom sooner, pick up a copy of my USA TODAY national bestseller, Millionaire Milestones: Simple Steps To Seven Figures. It’s packed with actionable advice to help you build more wealth than 90% of the population, so you can live free. Order a copy on Amazon today!

For more personal finance goodness, join 60,000+ others and sign up for my free weekly newsletter. You can also sign up here to get my posts send to your inbox as soon as they are published. Since 2009, I’ve been helping people achieve financial freedom sooner, rather than later.

Deciding On Whether To Accept A Preemptive Offer is a Financial Samurai original post. All rights reserved. Financial Samurai began in 2009 and is the leading independently-owned personal finance site today with ~1 million pageviews a month. Everything is written based off firsthand experience and expertise.

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Business

The Next Chapter for Streetball? How Creators Are Taking Over Basketball

Opinions expressed by Entrepreneur contributors are their own.

Every basketball player dreams of making it to the NBA — but for most, that dream goes unrealized.

“When you stop playing, a part of your identity as a basketball player fades,” says Scotty Weaver, a former college hooper turned basketball content creator. “It’s always that feeling of never making it.”

While playing overseas or in semi-pro leagues is still an option, it rarely comes with the recognition that the NBA offers. With The Next Chapter, Weaver is aiming to change that.

Co-founded with fellow basketball creator D’Vonte Friga, The Next Chapter (TNC) is a premier 1v1 basketball league spotlighting some of the most dynamic streetballers in the game. Players go head-to-head for cash prizes in a format reminiscent of cage fighting.

The prologue

Weaver was in the streetball content world long before TNC, starting out working with BallisLife doing content with their East Coast squad, where he met standout player Isaiah Hodge, aka Slim Reaper. They left Ballislife and started making their own street ball content with a group called The Wild Hunt. Weaver would bring his Wild Hunt team to local parks and film five-on-five basketball videos.

“We had a bunch of guys who were characters,” Weaver says. “Slam dunkers, guys doing creative dribbling, big talkers. Everyone brought their own personality and energy.”

The five-on-five format helped draw big crowds, but it made it tough for Weaver to pay the players involved consistently.

“To help pay the team, we asked after the event if they wanted to run some one-on-ones with people at the park,” he explains. “When that video comes out, we’ll post it as the next chapter — and whatever it generates will be how we pay you. So your ability to earn is directly tied to your performance in the video.”

That model incentivized players to talk trash, play flashy and stand out, turning the games into even better content.

They started featuring one of their players, Lah Moon, in a one-on-one after every park run, challenging the best and bravest from the crowd. After a string of undefeated performances, Moon finally met his match in former college hooper Nasir Core, whose dominant showing made him a standout in the community.

Sensing they were onto something, Weaver brought Core in as another featured one-on-one player, laying the groundwork for what would eventually become The Next Chapter. Season One featured seven players, each compensated based on how well their videos performed. They shot all seven episodes in a single day and posted them over several months.

“Season one did great,” Weaver says. “Players started to see how much money they could make on this.”

What began as a way for players to make some extra money has unexpectedly evolved into a potential career path for streetball creators.

“We just paid attention to what people wanted to watch,” Weaver says. “What we’re building is a basketball league — whether it’s one-on-ones, two-on-twos, three-on-threes, or five-on-fives. Right now, we’re focused on ones because they’re far more marketable. But we never want to close ourselves off to the idea of doing it all.”

The ‘UFC’ of hoops

TNC’s marketing strategy channels the spirit of Vince McMahon and Dana White, building stars by spotlighting unique personalities and skill sets. YouTube phenom Devonte Friga knows this process well, having grown his personal channel to over a million followers.

“We’re trying to build the UFC of one-on-one basketball,” Friga says.

He points to one of TNC’s standout players, J Lew, whom the marketing team cleverly labeled “the internet’s shiftiest hooper.”

“There are so many players like that — each with small, unique parts of their game that define who they are. Take NAS, for example. Online, he’s dominant. He doesn’t just win — he wins big — and makes sure everyone knows it. Then there’s Moon, whose unorthodox one-on-one style is so distinctive that NBA 2K flew him out to capture his crossover move, even though he’s not an NBA player. It’s those little things — the way a player stands out — that turn them into a star.”

The next chapter for The Next Chapter

Although most TNC players are streetballers, the league is experimenting with a new format on June 6: a one-on-one showdown between former NBA players Lance Stephenson and Michael Beasley, with $100,000 at stake.

The matchup will serve as the finale of Season 2, which featured 20 episodes of the two pros coaching opposing squads, building anticipation for their long-awaited faceoff. The event will be available via pay-per-view, a bold move for a league whose audience is accustomed to free content.

Still, Weaver is confident fans will see the value.

“I think it’s about proving to your audience that when you ask them to spend their money, there has to be a clear sense of value — like, wow, I actually got something great in return — rather than, this just feels like the same thing I was getting for free, but now I have to pay for it.”

While some details are still being finalized, Weaver estimates that moving forward, about 95% of TNC content will remain free, with roughly 5% behind a paywall.

While others — like former NBA star Tracy McGrady with his OBL league — have explored the 1v1 basketball space, The Next Chapter is carving its path from the ground up.

“Unlike Tracy’s league, we don’t need to be something big right away,” says Friga. “What we’re building is completely different, and I believe it has the potential to become a billion-dollar industry.”

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Business

A Terrible Life Insurance Mistake That Cost Me A Fortune

In late 2022, my wife and I were finally able to lock in matching 20-year term life insurance policies at an affordable rate through Policygenius. For five years prior, I had been concerned that I wouldn’t be able to get approved at a reasonable price—all because of a mistake I made by visiting an overzealous sleep center.

Back in 2016, I was tired of paying $1,800 a month for a health insurance plan with UnitedHealthcare and never using it. I hadn’t seen a doctor in years, so when a new sleep center opened up nearby, I figured I might as well get checked for snoring and put my insurance to use.

Of course, one check turned into a full battery of tests, costing my insurance company about $3,800. At first, I felt good—I was finally getting something for all those insurance premiums! But little did I know, that visit would come back to haunt me. The unfortunate consequence of going to the doctor was being flagged with a “sleep-related” issue, such as sleep apnea, which made it much harder to qualify for affordable life insurance later.

When I tried to renew my 10-year term life policy through USAA in 2017 at age 40, they quoted me $450/month—up from the original $40/month. A ridiculous 11X higher! No thanks. I’ll look elsewhere.

Table of Contents

My First Two Life Insurance Mistakes

My first real life insurance mistake was going to a doctor before renewing my policy. Had I kept a clean medical record—aside from routine physicals—my new policy would have cost closer to $120/month now that I was 10 years older. Always lock down an affordable life insurance policy before seeing the doctor for anything out of the usual.

But frankly, the first mistake was only getting a 10-year term policy at age 36. I should have gone for a 30-year term at around age 30. After 30, life tends to get much more complicated with housing and family.

Just a year later, I took out another $1+ million mortgage to buy a fixer-upper. Three years later, my son was born. When you have children and debt, life insurance becomes a priority. A 30-year policy back then would’ve cost me about $30/month—an absolute bargain in hindsight.

At least I managed to course-correct by securing a new 20-year, $750,000 term policy through Policygenius for $110/month in 2023. They matched us with SBLI, a carrier willing to underwrite both me and my wife, even with my prior sleep center visit.

But then I made another mistake—by far the worst one yet. It sickens me to write this, but as always on Financial Samurai, I share both the wins and the painful losses to try and help as many people as possible.

The Worst Life Insurance Mistake Possible

My wife recently asked me to send her our rental insurance policy from USAA because Wells Fargo, which holds our remaining rental property mortgage, needed proof of coverage.

When I logged into my USAA dashboard, something odd caught my eye:

“Level Term Series V Policy – $1,000,000 for 10 years.”

It looked like my old term life policy, so I clicked in. And then—WHAM.

The number that jumped out? $885.79/month.

What the hell? What was this doing here? Was this an advertisement or what?

Nobody in their right mind would pay nearly $900 a month for just a $1 million term policy—unless they were terminally ill and had no other options. I certainly wouldn’t.

USAA is the worst. Charged me $885.79/month in life insurance premiums for a $1 million term policy without my consent. This is an auto-debit.

But dread began creeping in. What if I had been paying this all along?

I quickly logged into my Citi bank account, where USAA autopays are debited, to investigate.

Unnoticed Payment For Two Years

Here’s what I discovered when I logged into my bank and searched for USAA. And let me tell you, it wasn’t good.

A Terrible Life Insurance Mistake That Cost Me $20,000

To my horror, I had been paying over $800/month to USAA for at least 18 months straight. That’s as far back as my bank’s custom search would let me go.

My stomach sank. How could I be so careless?

Back in late 2022, I thought I told USAA I wasn’t willing to renew my 10-year term life policy when they quoted me ~$450/month—a drastic jump from my original $40/month rate.

So why, without my consent, why did they charge me even more?

Since my original 10-year term policy with USAA expired in January 2023, I’ve paid over $20,000 in premiums to USAA despite thinking my policy had ended!

My whole point of getting a new 20-year, $750,000 term-life insurance policy through PolicyGenius in 2022 was so that I wouldn’t have to pay the new $450/month rate USAA quoted me back in 2017. Oh my.

How Could I Have Missed Overpaying for So Long?

I’ve asked myself this question more than a dozen times. Here are five reasons:

Bundled coverage: USAA handles multiple insurance lines for me—rental properties, auto, umbrella, valuable personal property—so when an $800+ charge hit, I didn’t think much of it.
Inconsistent billing cycles with auto-debiting: USAA bills me monthly, semi-annually, and annually across different policies. Whenever I saw a large charge, I assumed it was for a quarterly umbrella renewal or something similar.
Bad timing: Sometimes I didn’t see the charge at all. If I didn’t log into my bank that week, the transaction got buried by the time I checked.
Blind trust: I trusted USAA to do the right thing. It never crossed my mind that they’d continue my 10-year term life policy and charge me 18X more per month than I’d been paying. I’ve been a loyal customer for 23 years.
Cash flow cushion: I’m fortunate to have strong savings habits and solid cash flow. The $740–$885 monthly charge for over two years didn’t impact my spending behavior. I save first, spend later—but the downside is being less watchful with expenses.

Despite all this, I take responsibility. No one forced me to set up auto-debit. I should’ve been more diligent about reviewing my finances regularly.

Don’t Expect Your Insurance Carrier to Voluntarily Save You Money

Since 2020, I’ve had multiple conversations with my insurance provider about property, auto, and life coverage. Not once did a representative flag my life insurance policy or ask, “Whoa—are you sure you want to pay over $700 a month for this? Let’s see if there’s a more affordable option that fits your situation.”

Instead, I received periodic nudges—emails and calls—urging me to increase my property insurance coverage. That meant coordinating with a property assessor, letting them in, and ultimately paying more when the policy renewed.

Don’t be lulled into thinking your insurance company is actively looking out for your best financial interests. Their job is to protect you from risk, yes, but they’re also a business. Once you set up auto-debit, they can quietly raise premiums, and you might not even notice. At the end of the day, they have a fiduciary duty—not to you—but to their shareholders.

Is It Legal for Life Insurance to Automatically Renew Like This?

Some of you might have empathy and wonder if jacking up a customer’s life insurance rate by 18 times or more is legal. Sadly, the answer seems to be yes.

If your original policy has a “guaranteed renewal” clause, and you don’t explicitly cancel, the insurance company can continue the coverage as an annually renewable term (ART) policy.

This means:

You keep your coverage without new underwriting
But the premium skyrockets every year as you age

Most people don’t realize this clause even exists. It’s often buried deep in the fine print. Therefore, another step for all of us is to thoroughly read the contract and ask questions about things you don’t understand. Don’t just trust your insurance carrier to do the right thing.

So technically, USAA didn’t break the law—but they sure didn’t do me any favors. The representative told me they have clients who pay these huge premiums because they simply can’t get coverage elsewhere.

Many policyholders fall into this trap. They assume the policy just ends—or that premiums stay flat. Insurers bank on that assumption to make maximum profits.

What I Did to Try And Get A Refund

Not one to lie down and get trampled on back and forth by a 7-ton elephant, I decided to contest the charges. I thought I clearly told USAA in 2017-2019 I would not renew the policy at their quoted rate of $450/month. So I most certainly wouldn’t have agreed to $720/month in January 2023 and the most recent $886/month charges.

Here’s what I did

1. Called USAA Immediately

Explained:

I was not clearly notified of the shift from level term to annual renewable term (ART)
I explicitly declined their renewal offer i
I only just discovered the $885.79/month charges
I’m requesting a retroactive cancellation and full refund of premiums charged since the term expired

I used firm but respectful language, such as:

“I would never have agreed to continue coverage at this rate. I feel misled and would like a refund for all premiums charged after my level term expired.”

2. Escalate if Necessary Or Desired

If USAA doesn’t do something, I may file complaints with:

My state’s insurance commissioner
The Better Business Bureau (BBB)
The Consumer Financial Protection Bureau (CFPB)

These agencies track complaints and put pressure on companies to resolve issues.

My Life Insurance Premium Refund Request

I understand I received coverage during the time I was paying premiums. Had I purchased a new 20-year term policy starting at age 45, I would’ve expected to pay around $150/month, or $1,800/year. I also recognize that if I had died during this period, USAA likely would have paid out the $1 million death benefit to my wife. Thankfully, I’m still alive—so here we are.

That said, I’m not asking for a full refund of the $20,000+ I paid. Instead, I believe a $16,000 refund is a fair compromise ($20,000 I paid minus the $4,000 I would have been willing to pay for two plus years).

No healthy 45-year-old male in 2023 would knowingly agree to pay $886/month for a $1 million term life policy. That’s not just overpriced—it’s highway robbery. I feel like USAA mugged me for my wallet and then slashed my tires on the way out.

How USAA Initially Responded

When I first called USAA to explain what had happened, the life insurance representative I spoke with was dismissive. She said there would be no refund and that the best she could do was cancel the policy. She claimed USAA had sent a notification about the renewal—one I never saw—and added that some members continue paying the exorbitant rate for whatever reason, which in her view justified the lack of follow-up.

After the call, I sat in silence for about 20 minutes, feeling defeated. Then I decided to call back—this time to request proof of where the notification had been sent. Because really, is a notification valid if the client never sees it or confirms their intent? I don’t think so. A default setting that quietly charges a customer 18X more without explicit confirmation feels predatory.

The second representative I reached was much more empathetic. She said she wouldn’t have paid that premium either. She explained that the notification had been sent to my online message center. Sure enough, when I scrolled back to November 2022, I finally found it.

Maybe an email alert had been sent to let me know there was a new message in my inbox—but if so, I missed it. Thankfully, this rep took my concerns seriously. She said she’d escalate the issue to her manager and the “Member Advocacy Team.” Hallelujah.

She assured me the advocacy team would do a thorough review, including listening to our recorded calls and examining the full account history.

The Feedback From USAA After Their Investigation

The representative from the Member Advocacy Team came back with an offer: a credit of two months’ premiums totaling $1,771.58. It was a good first step, but still felt far short. I had hoped for a more reasonable compromise—something closer to a $16,000 credit.

Then the tone shifted. She noted that after reviewing call logs dating back to 2022, she didn’t hear me explicitly say I didn’t want to renew the policy. Instead, she claimed I was simply inquiring about my options. To me, that should’ve strengthened my case—why would I be asking about options if I intended to keep paying an exorbitant premium? But she disagreed.

So I encouraged her to dig deeper into their call logs, further back in time, to see if there was any record of me clearly expressing my unwillingness to pay a fortune for life insurance. She agreed and asked me to email any supporting information I could find in the meantime.

Evidence I Wasn’t Willing To Pay the Higher Premium

I searched my archives and found two articles I had written that clearly documented my struggle to find an affordable life insurance policy before my 10-year term was set to lapse. I sent both to USAA, complete with publication dates, to reinforce my position.

“Convert Term Life Into Permanent Life Insurance To Keep Your Rate Class” – Published June 5, 2020
This post outlines how, after my son was born in 2017, I contacted USAA to explore extending my policy. After undergoing a medical exam, I was shocked to find my premium jump from $40/month to $450/month due to sleep apnea. I declined the offer, stating it was far too expensive, and made it clear I would search for a more affordable option.
“How I Finally Got An Affordable Life Insurance Policy With No Medical Exam” – Published December 21, 2021
This article details how, after years of searching, I finally secured a 20-year, $750,000 term policy through SBLI for $110/month. I noted that I was willing to carry both policies temporarily—doubling coverage for a year—while preparing to transition off the USAA plan.

These publicly documented posts show my intent and efforts to avoid high-cost life insurance by USAA and prove I never agreed to such a steep renewal. I could only hope they help USAA reevaluate their position.

Hard to Trust USAA With Our Insurance Needs Anymore

Unfortunately, USAA came back from further investigation and said the $1,771.58 credit was the best they could do. They were shutting the case. Ugh.

What’s most disappointing is that, after 23 years as a loyal USAA member, I truly believed the company would do right by me. I’ve consistently paid my premiums on time and have been a responsible, engaged customer.

Most people don’t fully understand the intricate details of life insurance policies, renewals, and their fine print. I did my best to stay informed, yet I still feel like I was misled and ultimately taken advantage of. Communication is not effective if the other side doesn’t receive or acknowledge.

Without a more equitable resolution, it’s hard for me to continue placing my trust in USAA.

The One Silver Lining From This Careless Debacle

If there’s any silver lining, it’s this: by sharing my story, I hope to prevent at least one person from falling into the same trap. Don’t assume your term life insurance policy ends when the term is up—it often doesn’t. Unless you actively cancel it, it may auto-renew, and the premiums can skyrocket.

All this time, I thought I was being a responsible father and husband—saving money and protecting my family in case I were to pass. In reality, I was a careless fool who failed to double-check his expenses.

As a result, I actually put my family in a more compromised position due to our reduced monthly cash flow. I had bought a house in October 2023, which drained my liquidity and increased my stress for at least six months.

The first year after a home purchase is the most financially vulnerable time and I sure could have used that extra ~$800/month in health insurance premiums I didn’t realize I was paying.

Tips to Save Money on Life Insurance Premiums

Be loud and clear about your intentions on recorded calls—don’t assume anything will be understood or noted unless you say it explicitly.
Review your expenses monthly. Don’t let auto-debits go unchecked. If something looks off, cancel or investigate immediately.
Lock in a 30-year term life policy around age 30 while you’re still young and likely healthier for the best rate. Your life will most likely get more complicated and expensive.
Avoid unnecessary doctor visits right before applying for life insurance—they might uncover minor issues that raise your premium.
Don’t expect your insurance carrier to proactively save you money. Their goal is to maximize profits, not look out for you.
If you’ve had health issues, go on a health kick for at least six months—then reapply to try qualifying for a better rate.
No matter how badly you fail, keep fighting to protect your family’s financial security. No one else will do it for you.

Going forward, I’m returning to my “broke mindset”—keeping my checking account lean, like a college student on minimum wage. Having extra cash flow felt nice, but for me, it bred complacency and laziness. That ends now.

As punishment for my carelessness, I’m committing to a strict no-spend challenge until I make up for the $14,228.42 in excessive life insurance premiums I paid ($20,000 total minus the $1,771.58 refund and the $4,000 I would’ve paid for 26 months of coverage). Alternatively, I’ll side hustle or make new investments to recoup the $14,228.42 in overcharges.

I’ve already spent hours fighting my case and writing this post, and I hope it helps you make better life insurance decisions. Now it’s time to move forward in the way only I know how.

Readers, have you ever gone through something similar with a life insurance policy—or any other product or service? Have you ever discovered you were paying for something you didn’t realize, thanks to auto-debiting or just plain oversight? If so, please share your story so I don’t feel like the only one who got duped by carelessness. Misery loves company—and maybe we can all learn a little from each other’s mistakes.

Life Insurance Policy Recommendation

If you have debt and dependents, getting life insurance is one of the most responsible financial moves you can make. I recommend checking out Policygenius, an insurance marketplace I’ve trusted for over 10 years. Simply enter your coverage needs, and Policygenius will match you with top-rated carriers offering competitive rates.

To expedite your journey to financial freedom, join over 60,000 others and subscribe to the free Financial Samurai newsletter. Financial Samurai is among the largest independently-owned personal finance websites, established in 2009. Everything is written based on firsthand experience and expertise.

Intellectual Insider

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Citigroup Gives Employees Two Weeks of Remote Work in August

1749586609 Jane Fraser GettyImages 2217646883

Citigroup is doubling down on its hybrid work policy by giving most of its 229,000-person workforce a remote summer perk.

According to a leaked memo sent to employees on Monday, obtained by Business Insider, Citigroup is giving its hybrid employees the option to work remotely for any two weeks of their choosing in August. Most Citigroup staff are hybrid and work in the office at least three days a week, with only traders and bank branch staff expected to work in person five days a week.

Citigroup’s Chief Human Resources Officer, Sara Wechter, sent the memo, which noted that the perk was part of the bank’s commitment to flexibility and its hybrid work policy.

“Our hybrid work model helps us attract and retain top talent and sets us apart from other companies in our industry — and we remain committed to this model,” Wechter wrote.

Wechter added that the bank chose August “because it is traditionally a quieter time for our businesses and clients, when many are already out of the office due to vacations.”

^{Citigroup CEO Jane Fraser. Photo by John Lamparski/Getty Images}

Citigroup last gave employees the option to work remotely for two weeks during the summer in August 2022. The bank has also offered two weeks of remote work every December since 2022.

Employees must work remotely from a location where they have a legal right to work, so this isn’t a “work from anywhere” arrangement.

While Citigroup reinforces its commitment to hybrid work, other banks are pushing for a return to the office. JPMorgan required most of its employees to work fully from the office starting in March, while Goldman Sachs has required it since 2021.

Citigroup CEO Jane Fraser has long been a proponent of flexible work. She opted to work part-time as a partner at McKinsey after having her first child, an arrangement she maintained until she departed McKinsey for Citigroup in 2004.

As the first woman to lead a major U.S. bank, Fraser has led a multi-year effort to transform Citigroup by updating its technology and encouraging work-life balance. Since becoming Citigroup CEO in March 2021, Fraser has emphasized that hybrid work was here to stay at the bank.

In March 2021, she created Zoom-Free Fridays at the bank so that employees were not required to take video calls on Fridays. She additionally urged employees to take their vacation time and keep work to standard working hours.

In January, Fraser told directors on a quarterly call that the bank’s hybrid work policy gave it an advantage in recruiting new talent and that the policy would continue.

Citigroup is doubling down on its hybrid work policy by giving most of its 229,000-person workforce a remote summer perk.

Citigroup’s Chief Human Resources Officer, Sara Wechter, sent the memo, which noted that the perk was part of the bank’s commitment to flexibility and its hybrid work policy.

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