Principal, LifeNet Insurance Solutions, Redmond, WA
In the best of all situations, life insurance quotes are a comparison of many, if not all companies at a particular health rating, amount and length of term. The problem for the consumer in this situation is that the human factor is missing. Does one carrier have different underwriting, can the broker make a case for a better health rating?
Quotes in life insurance are only estimates because the carrier itself is the only entity that can make an offer. Find a good independent agent and let them be your advocate.
Co-Founder, TermInsuranceBrokers.com, Goldenzweig Financial Group, Las Vegas, Nevada
Life insurance quotes are an estimation of the premiums you would pay for a given life insurance coverage structure (face amount and term length). However, a quote is only as good as the information it's based on. So if you run a quote at the most preferred rates and haven't factored in your height/weight, medications used, medical conditions, family medical history, tobacco usage, driving history issues, participation in extreme/hazardous activities, and a number of other factors, then the quote figures you ran are pretty much useless as they do not represent an accurate picture for the proposed coverage.
The risk classification is the MOST IMPORTANT part of any quote an insurance agent gives you because the risk classification determines the premiums for the coverage. The final risk class a carrier approves you at after underwriting your policy will tell you what premiums the carrier will require for the coverage to be active.
Many individuals like to see quotes with the most preferred rates (preferred plus risk class) as they are the cheapest cost and then they end up thinking that's what they should get (and if they don't get it, then they will forget the entire process and not even bother securing any coverage at all). What you apply for is not always what you get - not everyone qualifies for the best rates. For example, if you have a major medical condition (e.g. heart attack, diabetic, had cancer, etc.) and the quote that was ran was for a preferred plus risk class, you're wasting your time applying for it because every carrier is going to offer a higher risk class (and therefore require higher premiums) for the coverage (or possibly decline or postpone you for coverage depending on the details of the medical history).
This is why it's critical to work with an experienced, knowledgeable, independent life insurance broker who knows the right questions to ask and can shop the case among multiple companies so they can give you the most accurate quotes up front that represent a realistic expectation of what you can expect to pay for the desired life insurance program.
An important note: You NEVER want to just apply to a bunch of companies to see what sticks as this actually works against you because it's a red flag to insurance companies when they complete the MIB check during underwriting (Medical Information Bureau - every carrier checks this because if you were declined by other companies, they want to know why). You want to have your best (and most accurate) estimate up front so you get it right the first time so you can get the best rates for your program.
I hope the information is helpful - please feel free to contact me for assistance with your coverage and if you have any other questions. Thanks very much.
In simple terms, a life insurance quote is a proposal from a life insurance carrier to a prospective customer. The initial quote is generally based off of basic information about the person such as their age, sex, height & weight, tobacco use status and the amount of life insurance coverage they are seeking. For any meaningful level of life insurance the consumer should be aware that a proposal is only a proposal and not a firm offer of coverage. A life insurance quote is generally a contingent offer based upon best case assumptions. A life insurance application form will have to be completed in which the person applying for life insurance will have to answer medical questions and some lifestyle questions (do you skydive, etc.). It is also likely that the applicant will have to take at least a basic medical exam where blood and urine samples will be taken. For high amounts of life insurance coverage a much more extensive physical exam may have to be taken before the applicant will be approved for coverage.
That is a great question! A life insurance quote is like the estimate that you would get before having repairs done on your home or on your car. The estimate gives you an idea of what the expected cost of the repairs will be, and the insurance quote does the same thing. It is the expected cost of your insurance. Both estimates can be on the mark, or different depending upon what the company finds when they start looking closely at the work. In the case of life insurance, that would be your medical history, the underwriting decisions, and the prescription history that you have. I hope that helps, thanks for asking!
Life insurance quotes are the rates that you are expected to pay based on your age, gender, tobacco status, and health details. Life insurance rates are the price you actually pay.
If you are looking at simplified or guaranteed issue policies where there is just one set of rates, then your quote will be what you pay (if approved for the policy).
If you are looking at a policy that requires an exam, or that offers more than one set of rates, then the quote may not be what you actually pay. A good agent will go over your health details and do their best to match you with a policy that has the best price for your unique profile. The more you share and the more experienced your agent, the more likely that the rate you pay will match your quote. But you never know for sure until your policy is approved.
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Quotes in life insurance are only estimates because the carrier itself is the only entity that can make an offer. Find a good independent agent and let them be your advocate.
The risk classification is the MOST IMPORTANT part of any quote an insurance agent gives you because the risk classification determines the premiums for the coverage. The final risk class a carrier approves you at after underwriting your policy will tell you what premiums the carrier will require for the coverage to be active.
Many individuals like to see quotes with the most preferred rates (preferred plus risk class) as they are the cheapest cost and then they end up thinking that's what they should get (and if they don't get it, then they will forget the entire process and not even bother securing any coverage at all). What you apply for is not always what you get - not everyone qualifies for the best rates. For example, if you have a major medical condition (e.g. heart attack, diabetic, had cancer, etc.) and the quote that was ran was for a preferred plus risk class, you're wasting your time applying for it because every carrier is going to offer a higher risk class (and therefore require higher premiums) for the coverage (or possibly decline or postpone you for coverage depending on the details of the medical history).
This is why it's critical to work with an experienced, knowledgeable, independent life insurance broker who knows the right questions to ask and can shop the case among multiple companies so they can give you the most accurate quotes up front that represent a realistic expectation of what you can expect to pay for the desired life insurance program.
An important note: You NEVER want to just apply to a bunch of companies to see what sticks as this actually works against you because it's a red flag to insurance companies when they complete the MIB check during underwriting (Medical Information Bureau - every carrier checks this because if you were declined by other companies, they want to know why). You want to have your best (and most accurate) estimate up front so you get it right the first time so you can get the best rates for your program.
I hope the information is helpful - please feel free to contact me for assistance with your coverage and if you have any other questions. Thanks very much.
If you are looking at simplified or guaranteed issue policies where there is just one set of rates, then your quote will be what you pay (if approved for the policy).
If you are looking at a policy that requires an exam, or that offers more than one set of rates, then the quote may not be what you actually pay. A good agent will go over your health details and do their best to match you with a policy that has the best price for your unique profile. The more you share and the more experienced your agent, the more likely that the rate you pay will match your quote. But you never know for sure until your policy is approved.