How To Buy Term Life Insurance
Term Life Insurance Quoting
While acquiring term life insurance quotes is pretty simple and straight forward, the process of actually getting term life insurance can be a tad more complex. We're presenting this guide to assist with the process and appropriately manage expectations. We hope to walk you through the process and help you learn what to expect if you're a first time purchaser or further enlighten a returning purchaser.
You can use the term life quoting engine above to review quotes for yourself or anyone for whom you'd like to run the numbers.
Rule #1 a Quote is a “Quote”
Unlike car or homeowners insurance, where you can answer a few questions and pretty much have a policy issued, all underwriting for life insurance is done up front (which is why the claims process for life insurance is so much simpler than it is for home and auto insurance). So, you must submit to two main forms of underwriting Financial and Medical.
Financial underwriting is pretty straight forward if you're applying for less than $1,000,000 of coverage. You'll do little more than state your income. For higher face amounts, an additional questionnaire may be required and/or supporting documentation (not usually required until you reach into the 10's a millions) like a tax return.
Medical underwriting is the much more intrusive process when it comes to life insurance underwriting. You'll need to answer several health related questions, allow physical measurements be taken (i.e. height and weight), and usually give liquid samples for biometric analysis (that's the fancy way of saying pee in a cup and have a blood draw)
The process can take a little while. Generally up to 2 months, and after the case has been reviewed by underwriting a formal offer is made by the insurance company. This is where problems sometimes creep up. You may discover that your otherwise healthy self isn't quoit as healthy in the eyes of a life underwriter as you believe it to be. This doesn't mean they think you're going to die, nor does it mean that they are trying to soak you for more money (in most cases).
In truth the problem is more created by the faulty quoting process that agents sometimes use and the tendency to throw around a lot of industry jargon that means nothing to lay folks. Take for example our quoting engine at the top of this page. It's highlight likely that most of the people who visit this page haven't a clue how to determine their risk class. And unfortunately it defaults to preferred plus. Do yourself a huge favor and select standard (even if you are really healthy) and check out those quotes. Keep in mind this is just to give you a general idea. It's not an offer.
Step #2: Consult Someone Who Knows what they are Doing
This might sound a tad pompous, but lets be honest. You likely know next to nothing about life insurance, especially the underwriting process. Even if you had a short stint in the insurance industry years ago, there's a good chance your knowledge of the process is significantly antiquated compared to a present practitioner. Learning to be at peace with your limitations can help you in huge ways.
We've write life insurance business. A lot of it. We know who generally gives preferred plus offers who who almost never does. We know who tends to like what for certain medical conditions. Success is about finding the people who like you and keeping them close.
Step #3: Understand that an Offer Today can be Reconsidered
If the offer from the insurance company isn't what you hoped, don't despair. There's almost always the option to re-underwrite for a better risk class with improved health. Keep in mind, that this would require a situation that could reasonably improve (i.e. weight loss or getting something like blood pressure or cholesterol numbers under control).
Step # 4: Don't Loose Sight of What's Important
If an offer is made that is less attractive than what you were originally looking at, keep in mind that you were looking for term life insurance quotes for a reason…you need coverage. The problem doesn't go away and you are not released from your financial obligations just because underwriting didn't make the offer you wanted them to make.
If the actual offer causes budget problems, you can always reduce death benefit, remove riders, and/or change payment frequency to something more budget friendly.
Keep in mind that we, like all independent insurance agencies don't really care what company you end up buying from; we only really care that you use us to make that purchase. We're dedicated to finding you the best possible rate for your circumstance and do not operate exclusively for one company. This ensures the best possible outcome for your term life insurance purchase.
You can also see a post we've done on this topic of quoting term life insurance.