Today, simply finding rates for life insurance is easy. But, actually coming up with the very best quote for the life insurance coverage that will fit your specific protection needs may not be as simple as you think – unless you are working with the right company.
Determining the best life insurance quotes is important, as it can make a difference in how much you pay on an extended basis for your coverage. This is especially the case if you plan to purchase permanent life insurance protection and keep the policy in force for the remainder of your life.
There are numerous factors that go into determining the quote on a life insurance policy. This begins with the information that is requested on the life insurance application for coverage. Just some of the criteria that is included here is your:
In addition, most traditionally underwritten life insurance policies will require that an applicant take a medical examination. This typically encompasses meeting with a paramedical professional who will take a heart rate and blood pressure reading.
The exam will also require that a blood and urine sample be submitted. These samples will be analyzed by the life insurance company in order to determine whether the applicant has certain conditions that could deem him or her a health related risk for potentially filing a claim. If so, the applicant could either be denied for coverage, or placed into a substandard rating category and charged a higher amount of premium.
Another big key in the price that you will pay for life insurance has to do with the type of coverage you are purchasing. There are many types of coverage on the market today, and each offers differing features and benefits. Because of this, the premiums can differ a great deal.
Those who have certain pre-existing health conditions will usually need to answer additional questions that are related specifically to their particular condition. This will help the life insurance underwriters to get a clearer picture of the person and how he or she is controlling and / or managing their health.
Some of the questions that you may be asked by the underwriters if you have a pre-existing health condition include the following:
Once the underwriters have reviewed all of the information about you and your health, they will be able to get a much better idea of your insurability, and will in turn, be able to come up with a more appropriate life insurance quote for your coverage.
Although most insurers differ somewhat, most will price their insureds into one of three primary classifications. These include:
If you are declined due to a certain health related condition, there is still a possibility that you could obtain life insurance coverage through a no exam life insurance policy. With these types of plans, there is no medical underwriting performed, and in many cases, there are few – or no – health questions asked on the application for coverage.
Because there is no medical underwriting, coverage can usually be issued very quickly for these policies – oftentimes within just days, as versus weeks (or longer) for traditional life insurance coverage. This can be a real plus for someone who needs protection fast.
Typically, the premium that is charged for a no exam life insurance policy is quite a bit higher than for comparable coverage that is medically underwritten. However, in many instances, this could be the only alternative for obtaining the life insurance protection that you need.
When deciding on life insurance protection, there are different types of coverage that you can choose from. Overall, there are two primary categories of life insurance. These are term and permanent.
Term life insurance is considered to be the most basic type of life insurance coverage on the market. This type of life insurance provides pure death benefit protection only – which is why it is typically the most affordable coverage available.
With term life, there is no cash value or savings component included with the policy. So, the policy holder is simply paying for death benefit coverage for a certain length of time. These policies are usually purchased for set time periods such as 10, 15, 20, 25, or 30 years, depending on the needs of the insured. (Applicants who are over a certain age may not be able to purchase 30-year term coverage).
It is often possible to purchase riders with term life insurance policies. These riders may include an accidental death benefit where the beneficiary will receive additional proceeds if the insured’s death is due to an accident, or a conversion rider that gives the insured the right to convert the term policy over to a permanent form of life insurance coverage (learn more about term life insurance HERE).
Permanent life insurance policies have both a death benefit component and a cash value component. With permanent coverage, the policy holder is able to build up savings within the policy on a tax deferred basis. This means that the gain in the cash value will not be taxed until the time it is withdrawn. This can allow the funds to essentially grow and compound on an exponential basis over time.
There are several different options when it comes to permanent life insurance policies. The most common type of permanent life insurance policy is whole life. Whole life insurance offers a guaranteed death benefit to the policy holder throughout the life of the policy – which, as the name implies, will last throughout the whole life of the insured (provided that the premiums are paid).
One of the features of whole life insurance is that some policies offer a dividend option to the insured. Policies that provide a dividend are called participating policies. (Those that do not are referred to as non-participating policies).
Dividends are paid when the actual cost to provide life insurance through the policy turns out to be less than what the insurance company estimated in its original projection. When this happens, the insurer will return a portion of the premium to the policy holder in the form of a dividend.
While many whole life insurance policies require that the policy holder pay a regular, ongoing premium, there are other options as well. For example, single premium whole life policies require that just one large single premium is paid and then the policy is considered “paid up.”
Another type of permanent life insurance is universal life. These plans have been described as being somewhat similar to a term life insurance policy with a cash value component. Rather than an insured simply purchasing a term policy and “investing the difference” though, part of the universal life policy’s premium goes towards the death benefit and part of it goes into a cash value account that earns interest as an investment. Similar to with a whole life insurance policy, this cash value is allowed to grow on a tax deferred basis.
Universal life is also described as being more flexible than whole life. With these policies, the policy holder is able to change – within certain limits – the death benefit, as well as the timing and the amount of the premium. For instance, if the policy holder opts to pay a lower premium amount within a certain time frame, then the cash value will not build up as rapidly. However, the guaranteed amount of life insurance death benefit will remain in-tact.
Yet another form of permanent life insurance coverage is variable universal life. With this type of coverage, the policy holder gets a permanent death benefit coverage option, along with flexible terms and investment options. The policy holder is also, within certain limits, allowed to change the death benefit, as well as the timing and the amount of the policy’s premium.
This type of plan will also allow the policy holder to invest their cash value into professionally managed funds that reflect the performance of underlying investments. Yet, while these underlying investments can offer the opportunity to build up the cash value more rapidly than with whole life, it can also subject the policy holder to more risk as well. Therefore, it is important to be mindful of this.
With so many different types of life insurance coverage available today, it can be difficult to determine which type of policy is right for you. Therefore, it is important to first evaluate your coverage and protection needs, as well as the time horizon of those needs.
For example, if you are covering a “temporary” need such as the payoff of a 15-year mortgage balance, then it is possible that a term life insurance policy may be the better fit. This is because the premiums for term insurance are typically less costly, and this particular need has a specific end date.
If, however, you need coverage for an indefinite period of time such as to cover estate taxes or to provide income replacement for the remainder of your spouse or partner’s life, then it is possible that a permanent life insurance policy is right for you.
In addition, because of the many cash value build up options that permanent life insurance can offer, these plans are also oftentimes used as a supplemental savings vehicle such as for college savings and / or for additional retirement savings needs.
The amount of coverage that you need should also be evaluated closely before you purchase your life insurance policy. This will also entail a determination of the financial need you wish to cover, as well as the length of time you want to have it covered.
Today, there are many life insurance needs calculators available. Likewise, you could also make a determination based upon the amount of income that would need to be replaced if the unthinkable were to occur – as well as for how long – in addition to determining the cost of final expenses, unpaid debt, and other financial obligations.
It is also important to keep in mind that life is constantly changing – and, with life’s many changes will oftentimes come the need to re-evaluate your life insurance requirements. Changes such as marriage or divorce, the birth or adoption of a child or grandchild, or the sale of your business could all spark the need to increase or change your life insurance coverage. With that in mind, it is essential to regularly review how much coverage you have, and to likewise determine if the amount is adequate for your current protection needs.
When you’re ready to start searching for life insurance coverage, it is always best to compare several policies prior to making your final decision. This is because life insurance quotes can differ a great deal – even for the very same coverage.
Why? Because even though premiums are determined in a similar manner by insurers, different carriers may have slightly different criteria overall. This means that what may constitute a substandard rate at one insurance company could be a standard rate at another – which in turn, can make a big difference in premium price.
If you would like a direct, unbiased comparison of a variety of policies, benefits, and life insurance carriers, we can help. We work with many of the top life insurance companies in the market place, and we can get you the information that you need quickly, easily, and extremely conveniently – directly from your home computer, and without the need to ever meet in person with a life insurance agent.
We can get you direct comparisons of the benefits that you want – all within just seconds. Just simply type in a few variables and click! In order to get the process started, all you have to do is fill out the form on this page.
If you should have any additional questions regarding how to determine life insurance quotes, what type of life insurance policies are available, or even just about life insurance in general, our experts are here to help.
We understand that making a purchase of life insurance coverage can at times seem overwhelming. There are numerous details to be aware of, so we want to ensure that you are making the decision that will best fit your specific needs. For any question or concern that you may have as you move forward, please feel free to contact us directly, toll-free, by calling 888-229-7522.
Don’t leave your loved ones to face the unexpected without the financial protection that they need. A good, solid life insurance policy can help the ones you care about move forward. Contact us today for all of your coverage needs. We’re here to help.