Compare Life Insurance Quotes (2024)

Getting multiple quotes for a thorough life insurance comparison can help you select the right policy and avoid paying higher premiums.

The amount of coverage should be tailored to fit your individual needs and those of your loved ones. Think about the kind of financial support your beneficiaries would require in the event of your death. A death benefit can cover everything from mortgages and car payments to credit card bills, personal loans and college tuition.

The best way to start the process of shopping for life insurance is to assess your financial situation, how much coverage you need and what you can afford. If others depend on you to provide financial support, you might need more coverage than someone single and childless:

• Calculate coverage needs: Start by calculating how much cash it would take to pay off all of your major debts like mortgages, car loans, medical and credit card bills, school loans or tuition, and other high-dollar accounts. A good rule of thumb is to also calculate accruing retirement and investment income, in addition to potential funeral expenses.
• Consider riders: Life insurance riders provide additional protection or coverage for varying costs, which is added to your monthly premium. Common riders include those for accelerated death benefits, critical illness and disability. You can research available riders and their costs with each company. Some riders are included at no upfront cost. For example, some companies include living benefit riders within their standard policies.
• Financial strength ratings: When finalizing your decision, you want to be sure that the life insurance company you select will have the financial stability to pay out a death benefit to your loved ones. Independent ratings companies like AM Best provide financial strength ratings as an objective way to evaluate an insurance company’s ability to pay its obligations.

Once you’ve selected the coverage amount and plan type, the next step to buying life insurance is applying to see if you qualify. The application process usually requires providing health histories for you and your immediate family, answering questions about your lifestyle and taking a medical exam. Insurance companies typically offer the lowest rates to applicants who present the lowest risk.

Understanding key details about the process of buying life insurance can help you get the coverage you need at a cost you can afford. To help you in your search, we’ve put together a list of what to expect when you apply.

Gathering Necessary Information

Your date of birth is the most important factor in obtaining accurate quotes. If you plan to include any dependents on your policy, including a spouse, you will also need their dates of birth. Your gender, ZIP code and household income are also key factors in getting customized quotes. Height and weight and basic health questions round out the information needed to generate quotes.

Factors Companies Evaluate

Aside from the factors listed above, your health history, lifestyle and even driving record can be taken into consideration during the underwriting process. Many life insurance options also require you to take a medical exam. You should disclose all health conditions and high-risk lifestyle factors during the application process. A lack of transparency on your application can negatively impact your eligibility.

If You’re Declined

If you are declined after going through the underwriting process, you still have options. No exam life insurance policies might be a viable alternative if you are declined for medical or lifestyle reasons. These policies tend to have much higher premiums than traditional plans, but New York Life points out that new technology has allowed insurance companies to offer more competitive rates.

Guaranteed issue (GI) life insurance offers guaranteed coverage, with no medical exam and no health questions to answer. These policies offer more limited coverage amounts, typically capped at about $25,000, and are often used by older people or applicants with several pre-existing conditions.

Life insurance can seem fairly complicated because of all the coverage options and industry-specific terminology. It’s important to have a clear understanding of the features and benefits. Consulting with a licensed professional can help you navigate the fine print and exclusions of a life insurance policy.

Depending on the policy, some major pre-existing conditions and certain mental health disorders can exclude you from coverage. High-risk lifestyle exclusions include those for smoking, heavy drinking or high-risk occupations like coal mining or serving in the military. Additionally, self-inflicted causes of death are commonly excluded by some plans.

If you’re not familiar with the different types of policies, the starting point is to research the main types of life insurance: term and permanent.

Term Life Insurance

Term life insurance, sometimes referred to as temporary life insurance, offers coverage for a set period of time, commonly 10, 20 or 30 years. Most term policies are renewable after the term ends, with a new monthly rate set based on your age and health status at the time of renewal. Some term life insurance policies contain a conversion option that allows you to convert the plan to a permanent plan by a deadline set by the insurance company.

If the insured policyholder dies during the term, the death benefit will be paid to the named beneficiaries. However, if the term expires before the insured person dies, no death benefit is paid. Unlike permanent life insurance, term life insurance policies do not feature a cash value component.

Permanent Life Insurance

Unlike term life insurance, permanent life insurance policies last for the insured’s entire life and feature a cash value component. Some common permanent life insurance plans:

• Whole life insurance is the most common form of permanent life insurance that allows you to withdraw or borrow money against the policy’s cash value. Whole life policies are fairly predictable in that they have fixed premiums, fixed benefits and a fixed rate of return. This can be a drawback if you want more flexibility for premiums and cash value returns.

• Universal life insurance is a form of permanent life insurance that offers the additional features of having flexibility with your premiums and adjusting the death benefit. Universal life policies can grow in cash value when interest rates rise but require regular monitoring to avoid underfunding, which can require you to make large payments to catch up. You may also face tax consequences by excessively overfunding your policy.

• Variable universal life offers flexible premiums and allows you to invest through sub-accounts tied to financial markets. On the plus side, variable universal life plans can help build wealth if your subaccounts perform well. On the other hand, since investment returns are not guaranteed, you can lose cash value on your policy when markets underperform.

Providing accurate personal information is an essential part of getting accurate quotes for life insurance. Life insurance quotes are not necessarily “one size fits all,” but are customized based on several factors.

Like other insurers, life insurance companies base rates on the risk of paying out benefits. For example, a person with a pre-existing health condition might be more at risk of an early or unexpected death, increasing risk for the insurance company.

Lying on a life insurance application can have serious consequences, including voiding the contract and refusing to pay out the death benefit to your beneficiaries. Hiding a pre-existing condition or lying about higher-risk lifestyle factors like smoking or skydiving is considered life insurance fraud, which costs businesses and consumers nearly $75 billion per year, according to the FBI.