Life Insurance Quotes

A life insurance quote is an estimate of what the price of insurance will be.  A quote gives the estimated premium, which is the amount of money that needs to be paid into the policy each year.  A life insurance quote can be a bit more complicated than a simple price, because the price of the insurance can change each year.  A true quote will show the cost of insurance in every single year of the policy so that the policy-owner can make intelligent decisions about whether or not owning the policy fits into their finances over time.  It can be wise to compare quotes from multiple companies in order to find the best priced policy for your specific needs.

A quote is an estimate because the price of the insurance depends upon the health of the insured person.  A healthier person will get a lower rate, and a less healthy person may get a higher rate.  Insured people are classified into different groups by the insurance company, each group being given a specific health rating.  It is impossible to know which health rating a life insurance company will ultimately assign you without going through their underwriting process.  Please note that a quote is not a guarantee that the insurance will not cost more.

Basics of the Price of Life Insurance

The price of life insurance is ultimately affected by the amount of life insurance purchased (the face amount), the type of life insurance purchased, the age and health of the insured person, and the length of coverage needed.  These many factors can make getting an accurate quote difficult for many people when they don’t get any guidance.  It can really help to work with an expert in order to understand how each of these variables affects price, and to make sure that you understand what the quote is saying.

One of the most important pieces to understand is how different types of life insurance have very different prices.  Whole life and term life are the two most common types, and both types are very different products.  Term tends to be much less expensive than whole life on an annual basis, but the coverage expires.  Whole life is meant to last the entire life of the insured person, and in addition has a cash value account which can be tapped by the owner for money, even while the insured person is alive.

Within each type of life insurance, the policy can be structured differently and this can also have a large effect on price.  For instance a term policy can be purchased for a 10 year coverage window, up to a 40 year coverage window.  The longer the coverage, the more the insurance costs per year.  Whole life policies can pay dividends, which can be used to offset premiums.

So when you are getting a quote make sure that you understand the product that you are looking at, the amount of coverage that you need, and how health can affect the price.