Why do some life insurance quotes vary?
Many factors will affect quotes, so let’s explore some of the answers:
- Your age, health, height/weight ratio, and whether you are a tobacco user or non-tobacco user are big factors that will help determine your quotes. With many insurance companies, even your family health history can be a factor. Risky habits and/or hobbies can also be additional factors when determining your rate classification.
- In the beginning of the quoting process with different agents is where the quotes can vary quite a bit from one agent to another. Some unscrupulous (or unknowledgeable) agents may quote the lowest amounts in order to just get your business from the start, knowing very well that they will not be able to deliver by getting you approved at that same rate class and quote they originally gave you. Then they will try to bump you up to a higher premium once you have gone through the whole lengthy approval process and they only got you approved at a higher amount then they originally quoted.
On the other hand, having an experienced honest agent ask you the correct questions upfront will help that agent preliminarily determine your rate classification more accurately so you may hopefully get approved at your original quote. However, keep in mind even the most experienced and honest agents are really only making an educated guess on quotes based on their previous experience and with the preliminary limited information they have at the time. However once a full application is completed and submitted, along with Paramed examination results, ultimately your rate classification decision will be determined by the insurance company’s underwriters. So for example: An experienced honest agent may quote you higher in the beginning, which may turn out to be a lot more accurate to what you will actually get approved at by the insurance underwriters. Rather than a bait and switch with a low quote in the beginning by another agent and then they try to bump you up to a higher quote later on, once you are approved. Keep in mind, even if an experienced agent happens to quote you higher in the beginning, and you then you get approved at a lower quote by the insurance company, you still would only pay the lower rate you got approved at. (Not the original higher quoted amount!) I feel it is best, if there is a going to be a surprise, for the surprise to be to your benefit and not the other way around! - It is also important for your independent agent to try to place you with the insurance company they feel is best suited to approve you at a better rate classification then possibly other insurance companies, due to your specific circumstances or health conditions. The underwriting process varies among life insurance companies. For example: one insurance company might offer better life insurance quotes for applicants with diabetes than other insurance companies may offer. Some insurance companies are more lenient for risky habits, such as cigar smoking, than others, and some insurance companies are more comfortable than other insurance companies with covering people who have risky hobbies, such as scuba diving. Having an experienced insurance agent (or his/her team), know the correct insurance company to place you with, can end up saving you lots of money as well as extra time shopping around!
- As they say, compare apples to apples.
- When comparing quotes make sure the death benefit coverage and term length are exactly the same.
- Also make sure you are comparing the quotes for exact same type of policies, whether it is term, universal life, or whole life.
- Lastly, make sure to review life insurance company ratings of the company you chose. You want the insurance company to be there when your beneficiaries need them the most.
See Related Blog Posts by clicking links below:
- Life Insurance Quotes & Application Process - Demystified
- Life Insurance Price - Important Factors That Affect Your Life Insurance Premiums
Note: Life Insurance information can be confusing to many people. As an "independent licensed agent" I can explain things to you in simple terms so you feel comfortable making a decision. Then I can help you choose a life insurance policy, from many choices of different insurance companies, that you feel fits your needs. Plus if you choose to work with me you will have personalized service by a local agent that can shop premium quotes for you. If you would like my assistance to discuss and/or start the process of getting you insured please call me at 941-404-5334.
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