Life Insurance Quotes & Application Process - Demystified

Ever wonder how life insurance quotes are generated? It is not magic. There are many criteria that are considered.

The death benefit amount and the length of the policy will be some of the major pricing factors. Also underwriters will review your income, lifestyle, medical history, overall health, your family's medical history and any hazardous recreational sports or occupations to help determine your risk, which will be additional considerations greatly affecting your quotes as well.

There are several types of criteria that can affect the pricing factors and need to be gathered in order to make life insurance quotes more accurate. But ultimately the type of policy (including the death benefit amount & the length of the policy term), your completed application, your paramed exam results, and complete information gathered for your underwriting review will determine your exact premium amount.

Some of the basic preliminary information that will need to be obtained will be:

  • Birth Date 
  • Gender
  • Height and Weight
  • Do you currently, or have you in the past, used tobacco?
  • Your current and past health (including blood pressure and cholesterol levels)
  • Your family’s health history, including ages when parents or siblings may have passed away if applicable. (If they passed away after age 60, it generally shouldn’t affect your premiums.)

As I mentioned above, those items above are the main basic preliminary information items needed to start, but there many other types of criteria that are considered as well that are usually gathered in your completed application. Not always asked during the preliminary questions but questions about other risk factors, such as but not limited to: your driving record, scuba diving, motor vehicle racing, piloting planes, hand gliding, sky diving, etc. are normally on the application. So it is a good idea to volunteer any of this type information at the same time to get a more accurate preliminary quote. Otherwise you may have a higher quote after the application is completed, reviewed, and approved. 

Once preliminary accurate information is gathered, an independent agent can then shop the quotes for you. It is strongly recommended that an “independent agent” assist in helping you pick a top rated life insurance company that best fits your information given.  Unlike captive insurance agents working for one insurance company, independent agents can shop a very large number of insurance companies across the market for the very best quotes suited specifically for you. Since some insurance companies specialize in certain areas and are more aggressive in determining a client’s risk class, they may put you in a more preferred class (meaning lower premiums) than another insurance company would. Independent agents knowing which top rated insurance company to submit your application to, generally can save you a lot of money in the long run with the same coverage. A couple of examples could be:

  • One insurance company may be more lenient toward people of a certain age & health thereby offering lower rates than another insurance reviewing the exact same information from the same exact person!
  • Another example is that one insurance company may be more lenient toward people with diabetes, while another insurance company may be more lenient for folks that had another long term illness or disease.

After an application is completed, most (but not all) types of Life Insurance require a paramed exam, which is performed at no cost to the insured. The insurance company pays for the exam.

Finally, once the completed application and the paramed results are both submitted, then the insurance company’s underwriting department reviews all the information, which can take a while since they like be very thorough. When the underwriting department review is complete, they will either approve or deny the application. If approved, the underwriters will determine which risk classification you fall into. That risk classification assigned to you will ultimately determine the premium amount. The better your risk class, the lower your premiums will be. A majority of the time the premium amount will stay the same as quoted. However sometimes after receiving the full completed application with more thorough information than just the preliminary questions answered to get a preliminary quote, during the review the underwriter may find you to be more at risk than originally anticipated with just limited information. Then the premium may be higher than originally quoted. At that point you will have the chance to accept the new revised quoted premium amount and continue to move forward or stop the process.

Below is a reference for some typical life insurance rate classifications. However many insurance companies use similar but different names for each of the same classes and other insurance companies may vary their rate classifications altogether. Not all insurance companies have all those different classifications listed below. 

Keep in mind that the “Standard” classification is generally considered for average health, see below definition. So only if your health, etc is above average, would you even be considered for one the higher approval ratings.

Standard: This category is associated with average health as well as a normal life expectancy. Minor health issues may be present or, perhaps, weight is not optimum. Factors such as these coupled with the death of a parent due to disease before age 60 could also be relative to this category.

Non-Smoking or Non-Tobacco User

  • Super Preferred (Sometimes also called Preferred Best)
  • Preferred Plus
  • Preferred
  • Standard Plus
  • Standard
  • Substandard


Smoking or Tobacco User

  • Tobacco (non-cigarette)
  • Preferred Smoker
  • Standard Plus Smoker
  • Standard Smoker
  • Substandard


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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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