Frequently Asked Term Life Insurance Questions

There are several "quote services" on the Internet, which purport to provide price comparisons of the various life insurance plans available in the marketplace. Most of these services merely list the plans in order of their premium, or cost. Obviously, the least expensive plans appear at the top. Unfortunately (and all too frequently), prospects naively jump at the least expensive plan, apply for it — only to find out months later that they can't qualify for the rate "quoted." Then, they are forced to decide between starting over with another company, or accepting a rate which is higher than they really need to be paying. If your health and/or lifestyle is such that you have no reasonable chance to qualify for "preferred-plus" or "preferred" rates, your best bet is to search for the best "standard" rate.
 
For example, Bob, who is 6 feet tall, weighs 250 lbs, and takes medication for hypertension, is likely to qualify for "standard" rates. He shops around for the absolute lowest illustrated price he can find (a "preferred-plus" rate), which turns out to be $462.00 annually at XYZ Life. He applies for this policy, only to find out (eight weeks later) that the rate he was quoted is unavailable for him. However, the company is offering him their "standard" rate of $901.00 annually. Now, Bob must decide whether to start the entire process over with another company, or to accept XYZ's standard offer. Many people take the higher offer, knowing in their heart that they probably should have expected it. Unfortunately for Bob, if he had shopped for the best "standard" rate he would have discovered that his coverage could have been purchased for $634.00 annually if he had applied with a different company which has better "standard" rates.
 
Why waste time into applying for Company XYZ's "preferred-plus" rate at $462.00, when it should be obvious that the policy will (after underwriting is completed eight weeks later) be issued as a "standard" class, at $901.00. Had you known that "standard" was the best rate class you could qualify for, you could (and should) have applied to Company ABC, and easily qualified for their standard rate of $634, which is much lower perhaps because they don't offer a preferred class and merely average all non-smokers (standard or better) into one single rate class. For more on the differences between AccuQuote and "the others," including a discussion on Price vs. Value, as well as additional background information about AccuQuote, read our company philosophy

First, we are independent and objective. We are not owned, employed, or controlled by any insurance company. The information we provide is unbiased.
 
In the past, life insurance was generally purchased through an agent of a particular insurance company. In order to compare more than a few companies, the consumer had to meet with several agents, face-to-face, and listen to lengthy, confusing, high-pressure sales presentations.
 
At AccuQuote, we provide the information you need to make a well-informed choice among hundreds of products available. And, all of this is done in a matter of minutes, right over the phone.

No. Remember, the same plan in the same risk class will be the same price no matter where you buy it. Life insurance companies, not agents, set the pricing of the plans. If you see the same plan from another source with a price that doesn't match, you're probably looking at different risk classes.
 
If you are quoted the same plan but a different risk class (i.e. preferred vs. standard) from another quote service, or agent, ask yourself whether they really obtained enough information from you to accurately estimate which rate class you are likely to receive. Did they ask you about your family history, your health, your height and weight, whether you take any medications, whether you use any tobacco (or how long ago you quit), whether you participate in any hazardous activities, or about your driving record? And, if so, have they really paid attention to the information you've provided?
 
When you apply, you're not applying for a "rate" but rather a "policy." The insurance company will determine which rate class you qualify for only after all underwriting information has been evaluated.
 
Unlike many of our competitors, we ask you to answer more questions about your health and lifestyle. Unless you are asked (and you answer) enough questions up-front, any quote you receive will be meaningless, since the price may be different after the underwriting process is completed. At AccuQuote, we are very thorough because we know you don't want to be surprised later with higher rates. The more you understand about how things work, the better we'll look.
 
The important thing to remember is that finding the lowest rate available in the marketplace for your age is the easiest thing you could ask us to do. "Quoting" and "delivering" are two different things! So, if you want an accurate and deliverable quote, it's extremely important that you answer all questions on our free e-mail quote request form honestly, and with as much detail as possible.

In most cases, local agents sell only one or two products, which often time are not the lowest priced products available on the market. At AccuQuote, we have a database of thousands of products and deal with hundreds of life insurance carriers, which enable us to find you the best possible price and value in life insurance.
 
In determining the best value we take into consideration your complete health and lifestyle profile. We consider not just premium rates, but also the financial strength/integrity of the life insurance companies quoted, as well as important product features such as renewability privileges, conversion rights, available riders, and the actual availability of the products. Most life insurance agents simply do not have the same resources we have at their fingertips, therefore it is difficult for an individual agent to offer exactly the same high-quality service as AccuQuote. More importantly, we are not owned or operated by any life insurance company. Therefore we do not have any reason to push one life insurance company over another.
 
We commend ourselves of our service. Our company is made of real people. We’ve been in business since 1986 and have served tens of thousands of customers just like you. Take a look at what our customers have to say about us.

First, you're right. Many carriers' term rates have never been lower. In fact, rates have fallen approximately 50% since 1995! That's a big drop, and a big savings.
 
Today, life insurance companies obtain more information and better information about you before they accept you at their lowest rates. In the past, exams and blood tests were performed for only the larger face amounts and older ages. Now, virtually everyone must submit to a paramedical exam, including blood and urine tests.
 
The age of computers and the Internet has made it possible for new rates and plans to make it to the market faster than ever. The moment a new plan is introduced, the whole world can know about it almost immediately. Years ago, it would take months or years for agents to find out about new products. As a result of the quick dissemination of information each round of competition happens faster than in the past.
 
Advances in medical care have also made it possible for people to live longer than ever before. This means that life insurance companies don't have to pay the death benefits as soon. The savings have been passed on to the consumer in the form of lower rates.
 
Finally, these new lower rates require stricter health criteria to qualify than ever before. Some companies demand a set of health and lifestyle requirements that only a small percentage (e.g. 5%) of the applicants will meet.
 
Rates are so low right now that if you own term life insurance, you should compare your existing policy's rates, features, and guarantees to those currently available. Even if you bought your policy as recently as 1 year ago, it's very likely that, if you're still healthy, you could find a new policy that will provide:

• the same death benefit, yet cost significantly less, or
• the same death benefit, won't cost any more, yet may give you a longer guaranteed rate, or
• more death benefit, and cost less, or
• more death benefit, cost less, and provide longer guarantees!

Since you have nothing to lose by submitting the free e-mail quote request form, why not call us at (800) 442-9899 to find out whether you can get more for your money?

Many experts, as a "rule of thumb", recommend an amount equal to 10 times your salary. As part of our service, we can provide a much more accurate and personalized needs analysis for you, over the phone. We also encourage you to try our life insurance needs calculator. If you have any questions call us at 1-800-442-9899.

There are a number of ways in which to evaluate the financial strength, performance, and integrity of a life insurance company. At AccuQuote, we maintain a database of financial information about hundreds of life insurance companies. We only monitor the rates from insurance companies with a proven track record of financial strength, integrity, performance, and claims-paying ability. And, before quoting any company, we require that it have a rating of A, A+, or A++ by A. M. Best, the country's most recognized insurance company rating organization.
 
Other third party services, which measure insurance companies' financial strength, claims paying ability, and other financial categories include:

• Standard & Poor's
• Moody's
• Fitch
• Weiss

All of the above services assign "letter grades" to the various insurance companies. These letter grade ratings are not warranties of an insurer's current or future ability to meet its contractual obligation, but rather opinions based on the available facts about each life insurance company.
 
We can provide you with a financial profile, which includes the "ratings" from all of the above services, on every company we quote, as we maintain and update these ratings in our database of several hundred life insurance companies. Click here for more information about third-party ratings.

Although the qualifications for preferred rates vary between companies, generally you must be in excellent overall health. There can be no participation in any hazardous activities and there must be no history of drug or alcohol abuse. Preferred-plus criteria is even more stringent. You cannot use tobacco in any form. You must have no history of drug or alcohol abuse, and you cannot engage in any hazardous activities. According to actuarial tables, these are the people who are likely to live the longest. Each company may have a different name for them but these rates represent the lowest available premiums.
 
However, you need to understand that when comparing policies, even if you're in excellent health, there is a good chance you won't qualify for these best rates. In fact, only 5% - 40% of all applicants get this "super-preferred" rate. Typically, about 60% can qualify for the regular "preferred" rate. The rest fall into the "standard" category, or worse. At AccuQuote, we believe that it's in your best interest to get the facts up-front in order to minimize disappointment later. The specific criteria for these rates differ widely among the various insurance companies, and it is not uncommon for an individual to be classified as "standard" at one company and "preferred" at another.
 
"Standard" risks refer to persons who have had some minor health impairments in their lifetime. Examples of standard risks would include persons who have cholesterol levels of over 260, or who are 50 pounds overweight.
 
"Substandard" risks refer to persons who are having more than minor health problems. Companies charge them additional premiums depending on the risk factors involved.
 
The key is finding the right company. At AccuQuote, we constantly monitor each company's criteria so that we can assist you in finding a company that will have the best rates for YOU, based upon YOUR specific situation. We place thousands of life insurance policies annually and, as a result, have the experience to know which insurance companies will likely be best for you.
 
This is one of the principal differences between AccuQuote and many other seemingly similar services. We focus on the bigger picture. It requires a bit more work and thought to find the best available values, but our clients appreciate and deserve it.

Rates for smokers are higher than for non-smokers. In order to qualify for non-smoker rates, some life insurance companies require that you be smoke-free for at least one year; most require longer periods. Through our extensive research of the market, we have found that certain insurance companies treat smokers much more favorably than others. Just give us the details of your tobacco use through our quote request form, or call us at 1-800-442-9899 and we'll find the right company for you.

Believe it or not, most insurance companies treat all tobacco use including cigars, pipes and chewing tobacco in the same category as cigarettes. However, certain companies allow those that use pipe, cigar, or chew to qualify as non-smokers. This one difference alone can save you as much as 50% on your premiums! We know which companies will do so, and will recommend only those companies when appropriate. Call us today at 1-800-442-9899 to find out which company is right for you.

If your health is poor, or if you have been charged extra premiums or even declined for life insurance, you've come to the right place. Why? Many people in this category simply assume that coverage is either not available for them, or that it will cost too much. Perhaps you've applied somewhere else and been declined, or were offered a policy with an outrageously high extra premium or even been told that your case is too "difficult" to place.
 
Unless your agent understands the underwriting process for such specialized cases the odds are against you finding the right offer. Many agents don't want to spend the extra time and effort it takes to find the best offer for an impaired-risk case. The fact is, it's a lot of extra work. Most "quote services" focus their attention on quoting only the clean (perfectly healthy) cases. Unfortunately, the insurance companies with the best rates for healthy applicants are unlikely to be the companies you should be considering if you have health problems.
 
We can't promise to find coverage for you. However, we do have the experience to know which companies specialize in certain health impairments. Some clients may be offered "standard" rates by one company, yet extremely high "substandard" premiums from another. We know which companies are most likely to make you a reasonable offer. We can "shop" your condition with several of these companies in order to find the best offer.
 
If you think you are a substandard or an impaired risk, please indicate that on your quote request form and we will contact you with more details.

Most families have coverage on both husband and wife. There are many financial pressures on a family after the loss of either parent. Beyond the obvious final expenses, the financial strain on a family after the loss of a spouse can be significant, even if the deceased spouse wasn't working.
 
Often the surviving spouse will take time off work, or change jobs in order to spend more time with the children. Coverage for children is also available to cover final expenses and/or to guarantee insurability for the child's future.

There are several reasons.
 
First, if permanent insurance (i.e. whole life or universal life) is purchased at a very young age the insurance company will often guarantee the child the right to buy more insurance later in their life at regular intervals without providing any evidence of insurability. In other words, if you buy a little now, you are guaranteeing your child's right to buy more coverage later without having to submit to an exam and without having to answer any health questions. If the child later becomes ill, or uninsurable, these privileges could be the only means to obtain the coverage needed when the child becomes an adult. Example: One major company offers a rider to certain whole life plans which allows the insured to increase their coverage by purchasing up to $100,000 on each of 9 option dates between the insured's age 22 and 46, for a total of $900,000 of additional guaranteed future insurability! If waiver of premium is included and the insured is totally disabled on an option date, the options can still be exercised. As long as the total disability continues, the insurance company will pay for the premium on the policies!
 
If you, or anyone you know, have ever been declined for life insurance or charged a higher "rated" premium as a result of a health condition, you will be able to appreciate the value of the privilege to purchase insurance, at standard rates, without any medical exams, and without having to answer any health questions!
 
Second, it's very, very cheap. Insurance premiums are significantly lower for children, than for adults. Although you'll be paying for a longer period of time, the earlier you start a plan of permanent insurance the lower the total of the payments will be over one's lifetime.
 
Third, most children are healthy. This type of insurance is generally easy to get and doesn't usually require any medical exam.
 
Fourth, if permanent policies are started early, there is more time to build cash values, which can be used to help fund college expenses, or provide cash for other purposes, including retirement or a down payment on a house, etc.
 
Some companies offer term life insurance for children. Many of these policies include a conversion privilege, which allows the insured to exchange the coverage for permanent insurance. Most life insurance companies, however, do not sell term insurance on children but do offer attractive permanent plans on children.
 
In summary, there are many compelling reasons to consider life insurance on children. For more details, or a custom illustration based on your specific situation and objectives, give us a call at 1-800-442-9899, or go to our free e-mail quote form.

Yes. Be careful. Before replacing an existing contract make sure you closely compare the two policies in the following categories:

• Price
• Guarantee periods
• Convertibility
• Financial strength of the insurance companies
• Available riders, if applicable

Understand that a new contestability period starts (usually for the first two years). You should also be aware that suicide is not covered under a new contract(usually for the first two years).
 
Most importantly, DO NOT cancel any existing coverage until the new policy has been approved, paid for, and delivered to you. Before an existing policy is replaced, it should always be clearly determined that such a decision is in your best interest.

Each product, if renewable, has a contractually guaranteed maximum renewal premium that can be illustrated, and which is shown in your policy. This amount is the most you'll have to pay to renew the coverage.
 
Most insurance companies also illustrate current renewal rates, that represent the expected future renewal rates, which are lower than the maximum renewal rates. These rates are not guaranteed, and can be higher or lower than expected, but never higher than the guaranteed maximum renewal premium discussed above.
 
There is also a concept called "re-entry." After your initial guarantee period ends you can re-apply for new coverage. And, if you qualify, you can begin a new period of guaranteed rates (in effect, a new policy), which will generally cost less than your current or maximum renewal rates. This process is referred to as "re-entering," or "re-entry." Since your future good health is not guaranteed, the ability to "re-enter" is not guaranteed. Although re-entry premiums are often attractive, to illustrate such rates without showing the current and maximum renewal rates, and in the absence of a complete explanation(as if to imply that they are the same as renewal premiums) is universally condemned as unethical and deceptive.
 
If you select a short-term policy with the expectation of using the re-entry feature down the road -- then fail to qualify for re-entry -- you'll face outrageous, unaffordable rates thereafter. You'll have only two choices: pay the increased cost or lose your coverage.
 
Don't be shortsighted. Don't make the mistake of assuming that you'll be able to qualify for re-entry 10-15 years down the road. Remember, there is no guarantee of good health tomorrow. Don't be tempted to purchase a term policy with a lesser guaranteed rate period than you need, simply because it costs less. Look for a policy with guaranteed rates for as long as you need it to last. If you determine that you need 20 years of coverage, then buy a 20-year guaranteed level premium policy. It's that simple. Doing it any other way could come back to haunt you later. Whatever small savings you'll gain under the re-entry scenario isn't worth the extra risk to you and your family. Be smart. Don't risk your family's financial future. Buy a rate guarantee for the full period you need.
 
For a very insightfully written article on the issue of re-entry entitled "Re-entry Illustrations Will Haunt Industry," click here. This article was reprinted with permission from the August 1995 issue of "Bests Review".

No. Your policy will never be cancelled because of a change in your health, and you will not be asked to provide evidence of good health in order to renew your policy each year. However, YOU have the right to cancel your policy at anytime.

Most insurance companies offer an optional feature called "waiver of premium". This typically states that in the event you become totally disabled for a period of six months or longer, the insurance company will pay your premium until you are no longer disabled. This feature is optional (available at an extra cost) and must be chosen at the time of your application.

Generally, we handle the entire process right over the phone. Our service representatives will ask you the questions from the appropriate application form. Then, the completed forms are sent to you for review and signature. To get started call 1-800-442-9899

No. The insurance company pays for all of the underwriting expenses. You are under no obligation. Your only commitment is your time to take the exam.

The reality is if you’re thinking about obtaining life insurance coverage, you probably need it now. In fact, statistics show that most people don’t think about coverage until only after a major life event such as welcoming a new addition to the family.
 
Remitting the first premium along with your application will provide temporary conditional coverage during the application/underwriting process. We strongly encourage you to obtain this temporary coverage, especially if someone is currently financially dependent on you (i.e. your spouse, children, etc.). It is, however, not required.
 
Unfortunately, we have experienced situations where our clients have applied for coverage and died before their policy was issued. If money is not remitted with the application, benefits cannot be paid if an untimely death occurs during the underwriting process. We take the issue of coverage very seriously and seek to protect our clients as soon as possible.
 
Remember, you are guaranteed a full refund for up to 10 days after the policy is delivered to you, so there is no risk in submitting money with an application. The real risk may be not submitting money.

In most cases an exam is required. It will be done at the expense of the insurance company, at a time and place convenient for you -- usually right in your home. The exam is usually conducted by a licensed paramedic or medical doctor, and generally involves a blood test, urine specimen, blood pressure reading, height and weight measurement, sometimes an EKG, and a series of questions about your health history. The whole process takes about 20-30 minutes. Click here for tips on how to prepare for your medical exam.

At this time, the insurance company will begin to evaluate your case. This evaluation is called "underwriting." The answers to the questions on your application, along with the results of your medical exam, are initially reviewed by an "underwriter".
 
This process generally takes 3-8 weeks depending on the amount of information, which the insurance company must gather in order to make their decision.
 
Once all required information has been received, the insurance company will make their decision regarding whether, and at what rate, you qualify for the insurance.
 
Click here for more information on the underwriting process.

Your coverage does not begin until your policy is approved and your first premium has been paid. Most companies provide some temporary conditional coverage during the application process (assuming certain conditions are met). This temporary coverage is limited in time and amount. The availability, amount and conditions are described in the application and vary from company to company.
 
Important! If you are replacing existing coverage, you should never drop your existing coverage until your new policy has been approved, and your first premium has been paid.

If you find our information valuable, we hope you'll choose to buy your insurance through us. If you do, we are paid by the insurance company.

Yes. If at any time during the application process you change your mind for any reason whatsoever, you will receive a full refund, no questions asked. This guarantee continues until ten full days after your policy is delivered to you.

You must have your green card and have been a permanent resident for at least a year in order for most life insurance companies to provide you with coverage. We cannot provide life insurance quotes or coverage for temporary residents, including anyone with a work permit or visa, permanent residents without their green card, or green card applicants who have not yet received their green card.

The death of a loved one is a difficult subject for almost everyone. We have prepared a very useful checklist of things that need to be done when someone dies, and we hope that you will take the time to read through it now so that if the time comes you will be more prepared. You may also wish to print the page and place it with your important papers for future reference.

Yes. Many people don't realize that coverage does not begin until the first premium has been paid. It's unfortunate, but we have seen many untimely deaths happen when people were in the midst of the application process. Most companies will provide some temporary conditional coverage during the application process if certain conditions are met and the first premium is paid. A full refund during the application process is always your choice. Since there is absolutely no risk to you by doing this when the insurance company allows, making that first payment with your application will get your loved ones protected sooner.

Most insurance carriers offer several fractional premium modes, including all of the above. The charges for each fractional mode vary by insurance company and, unfortunately, the companies are not required to disclose the effective APR. AccuQuote strongly believes that carriers SHOULD disclose not only the APR, but also the annual additional costs of these fractional modes. To make things easy, we provide an easy-to-use APR calculator. Click here to view the APR calculator for fractional premium modes. Simply plug in the numbers and you'll have the information you need to intelligently determine whether the additional cost of paying fractionally (monthly, quarterly, or semiannually) makes sense for you.