Track & Compare Life Insurance Quotes

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1 Track & Compare Life Insurance Quotes The hardest part of buying life insurance is getting started. While lots of people avoid buying life insurance because they think it s too complicated, buying a house is a far more painful and elaborate process with a lot more moving parts. You can compare it to retirement planning, too that requires some high-level strategic thinking and educated guesswork (not to mention financial discipline to stick to the plan). Buying life insurance is about as tedious as applying for a personal loan at your bank or credit union lots of paperwork and a lot of waiting around, but ultimately, pretty easy.

2 How to use this tool Thanks for downloading our life insurance quote comparison tool! We ll try to make this as painless as possible. This spreadsheet has seven columns: 1. Insurer (the life insurance company) 2. A.M. Best rating (financial health of insurer) 3. Source (where you got the quote) 4. Underwriting Class Quoted 5. Requested coverage amount 6. Requested term 7. Monthly quote Let s touch briefly on why each of these is important to track: Name of the insurer: Each insurance company has its own pricing table, but their quotes should be consistent across sources. A.M. Best rating: This represents the financial health of the insurer i.e., is the company likely to be around in thirty years? Where you got the quote: For example, a life insurance quote comparison site like PolicyGenius, SelectQuote, or AccuQuote, or your friendly neighborhood life insurance agent. This helps you keep track of where you got the best life insurance quotes so you can come back to them later. It also helps you judge which source is the most accurate. The underwriting class quoted: Your underwriting class directly affects your final quote. If a quoting engine doesn t place you in the correct underwriting class, your quotes will be inaccurate. The requested coverage amount and term: These also directly affect your final quote. If you just track the final quotes and don t put in how much coverage or the term length that you requested, you ll end up comparing apples and oranges. Your monthly quote: The number everyone cares about.

3 Super helpful spreadsheet from 1992 Spreadsheets are awful. This spreadsheet? A little less awful than most. We designed this spreadsheet to feature all of the crucial details about life insurance policies that you need to track. We apologize that it looks like it just came out of a time machine from When you get your quotes, come back and type your information into these little boxes. Insurer A.M. Best Rating Source Underwriting Class Coverage amount Term Quote

4 How to compare life insurance quotes There are a lot of ways to get life insurance quotes. Most people start with an agent maybe someone they bought home insurance or car insurance from and then move on to the internet for a second opinion. Online, there are multiple life insurance quote comparison tools, including our own life insurance quote engine here at PolicyGenius. Here s advice that seems contradictory about which life insurance quotes to trust: It shouldn t matter where you get your quotes Not all quotes are accurate While those two pieces of advice may not add up on the surface, they actually make total sense. Let s dive into both of those further. It shouldn t matter where you get your quotes because life insurance prices are regulated All life insurance prices are regulated by state governments. How? Every life insurance company builds out giant rate tables (think of the worst, most complicated Excel spreadsheet you ve ever seen) that show how they price life insurance policies based on specific health conditions and lifestyle risks. They generally do this annually, but changes are relatively minor there s no point in trying to wait a year to see if they make a radical change to their pricing tables that benefits you in some way. That means that no matter who calculates your quotes an agent, an online quoting engine, a fortune teller at the county fair will come up with the exact same quotes for you (for a given insurer and the same coverage and term) because legally they have to use that insurer s filed rate tables. But that doesn t always happen Some life insurance quoting engines may try to mislead you by giving you inaccurate quotes. How does this happen? Instead of asking detailed health questions to accurately place you on those rate tables we mentioned above, these sites ask you to identify your own underwriting rate class by evaluating your own health. Let s be clear right now: you can t identify your own underwriting rate class (also called a life insurance classification) unless you happen to be an underwriter, and if you re

5 underwriter you re probably not reading this article. Even if you have a general idea of how healthy you are or even a detailed medical record in front of you, you can t calculate the exact underwriting rate class you ll get from any given life insurance company. Why? Because you need those aforementioned rate tables. Those rate tables lay down some pretty specific rules for each health condition and lifestyle risk, and each life insurance company has their own set of rules. What s more, life insurance companies are very conservative and have a different perspective about health and lifestyle than you or your doctor do. That s because they re looking at risk over a long horizon up to 20 or 30 years and have to make precise pricing adjustments even for small risks. Without a comprehensive health questionnaire upfront, it s impossible for an agent or quoting engine to give you an accurate quote across insurance companies. Even if you happen to correctly guess your underwriting class, why take the chance of getting it wrong? PolicyGenius tells all of our customers what we estimate their underwriting class to be when we give them their quotes. Not all life insurance quoting engines do this, and some may try to get you to apply before they tell you the underwriting class. Don t be afraid to be aggressive and get your estimated underwriting class before you apply. Click details to see Underwriting Class $ 29 /month Details $ 29 /month - Details More about this insurer More about this insurer Ratings Ratings What are these? What are these? Buy Now Save for later We ve done the research Read more about this policy & Transamerica Insurance Coverage $600,000 Term 30 Years Underwriting Class Preferred Plus Non-Tobacco Coverage OPTerm 30 Buy Now Save for later

6 Once you pick the life insurance policy that works best for you, you can apply through the source where you got the quote or literally anywhere as we mentioned before, your life insurance policy will cost the same no matter who you go through to get it. Your best bet is to go through the company you think will give you the best customer experience with the least amount of surprises. Why are there underwriting classifications at all? It s important to know why insurance companies use different classifications, and it has to do with risk. Insurers want to figure out which of their customers are more likely to die while the policy is in force, because those are the policies that will cost money for the insurer to pay out. If Joe buys a 30-year term policy when he s 30 years old and is still alive on his 61st birthday, Insurance Company X won t have to pay anything. But if Mike gets the same policy at the same age and dies when he s 55, Insurance Company X has to pay the policy s death benefit which is usually in the millions to his beneficiary. By looking at the health factors of the two men current health, lifestyle, family history, and so on Insurance Company X can see that Mike, who smokes and pilots small aircraft and whose family has a history of heart disease, has a higher chance of dying before he turns 60 than other men his age. Because of this increased risk, his policy premiums will be higher than Joe s maybe considerably higher. What determines a classification? As you noticed with Mike in our story above, insurance companies look at a wide range of health and lifestyle factors to figure out which classification you fall into. Each insurance company has their own criteria for determining the weight of each factor and how it affects your classification, which is why you may see different quotes from company to company. Another reason you may see different quotes is due to something called stretch criteria. According to a 2012 study by the Society of Actuaries, 65% of polled insurance companies have instituted a policy of stretch criteria, defined as any formal written rules that exist outside a company s traditional published preferred criteria[, and] that allow underwriters to vary from the preferred criteria. Essentially that means that companies allow some wiggle room for underwriters to look at other criteria when

7 judging an applicant s risk. The same study showed that companies did this primarily to allow flexibility in assigning classifications and to remain competitive against other companies who might be willing to offer someone better premiums. In other words: stretch criteria usually work in your favor and are designed to allow the life insurance company to lower their prices. Here are some of the most common factors that go into determining one s classification: Height and weight This is one of the more obvious categories. The insurance company will take a look at your height and weight to see where you fall within a certain range. Those with an appropriate weight for their height will come off the best, while those who are overweight will have a strike against them. The acceptable weights are different for men and women. Keep in mind that insurance companies don t just look at your current weight, but also your history of weight. Losing weight can help you save money on your life insurance, but not if you ve lost (or gained) 10 or more pounds within a year of your application. Why? Companies are wary of large fluctuations and want to see stability. This ensures that you didn t lose weight just to get a better deal on your premium and are going to hit the snack food and soda hard right after you re approved. Or, on the other hand, they don t want to assign you a classification if it looks like you re going to continue to blow up like Violet Beauregarde. Tobacco use They don t mention it on the Surgeon General s Warning, but smoking is bad for your life insurance premiums, too. Regular smoking is a major knock, but occasional smoking (like a cigar every now and then) or chewing tobacco can also have an effect on your premiums. Many insurance companies will have classifications specifically for smokers, as we ll see in a bit. Alcohol and drug abuse Having a beer every once in a while won t affect your premiums, but insurance companies will take a look at histories of abuse for alcohol and drugs when making their determination.

8 Family health history This is a big factor, and one that s mostly out of your control. If your family has a history of illnesses, such as heart disease, it s a red flag. This will count against you especially if there s a history of death before the age of 60. Lifestyle A catch-all category that includes how risky you live your life. If you re a base jumper, a fan of flying single-engine planes, or a bear wrestler, your chance of a premature death is a bit higher than someone whose hobby is to curl up with a nice book on the couch. Unfortunately, you ll pay a little more for those thrills. This could also include driving history. If you have DUIs or DWIs on your record, your premiums will be higher. Also, consider grabbing an Uber every once in a while. What are the different classifications? In general, there are four different classifications: Preferred Plus, Preferred, Standard Plus, and Standard. Some companies will have different names for them, but these are the most widely used. Then comes Substandard, which is a broad category that will include anyone who doesn t fit into the above. Finally, as mentioned, some companies will have categories exclusively for those who identify as smokers. Preferred Plus Sometimes called Preferred Elite, Super Preferred, or Preferred Select, a rose by any other name is still the best classification you can get. You re royalty to an insurance company. You re in excellent health, you have an ideal height/weight ratio, and your family history is as squeaky clean as your lifestyle. Well done, you re paying the lowest premiums! Preferred In this case, second place isn t so bad. You won t be getting the same deals as a Preferred Plus member but outside of a few minor factors, like high cholesterol or blood pressure, you re in very good health.

9 Standard Plus You re still doing pretty good. You re in good health, but you might have a few outliers to keep an eye on and you re not in the ideal height/weight range. Your family history is good, so you shouldn t have any surprises in your future. Standard You don t have the best height/weight ratio, you have an average life expectancy, and your medical test came back with a few notes. The main difference here is that your family history plays a role, and there are instances of family members having issues with something before the age of 60. But you re still able to get insured, which is the important part. Substandard This isn t a specific rating classification like the others; instead, based on your health and history, you re placed in what s called a table rating system, graded by either letters or numbers (typically either A-J or 1-10). This is because you have a complicated health history, or you ve had some recent problems, such as a heart attack or diabetes. You could be paying as much as an extra 250% on your premiums, which isn t ideal. But again, you can get insured. If you have dependents who are counting on your income and need protection, you ll still be able to help them in the event of your death. Your premium price will, on average, be the Standard price plus 25% for every step down the table: A Standard + 25% B Standard + 50% C Standard + 75% D Standard + 100% E Standard + 125% F Standard + 150% G Standard + 175% H Standard + 200% I Standard + 225% J Standard + 250%

10 Smoker If you smoke, insurance companies will typically have two levels to cover you. Due to the added health risks, you ll pay more as a smoker. Preferred Smoker is just what it sounds like: you d probably fall into the Preferred classification if you didn t smoke. This will usually cover occasional smokers or people who use smokeless tobacco. As a Standard Smoker, you d fall into one of the Standard classifications if it weren t for those pesky cigarettes. You should try knocking the habit, for your general health and not just the premium savings.

11 Looking for more guidance? Check out the PolicyGenius life insurance guide, our life insurance reviews, or ask our licensed agents a question directly.