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4 Tips for Life Insurance Shopping

brick wall with 4 painted on with life insurance shopping tips overlay

By McKenzy Bowers | July 31, 2019

Buying life insurance can be a seemingly insurmountable task. All the terminology to learn, all of the options to review and how to find the best deals – it’s a virtual nightmare and enough to send you packing up and saving the entire ordeal for another day.

Truth be told shopping for life insurance isn’t complicated when you have a guide alongside you. But before diving in, it’s important you understand a couple of things:

  • Life insurance is a privilege, not a right. So, you must be able to show that you’re a good bet.
  • You can’t buy too much coverage. Life insurance carriers are not in the business of making people worth more alive than dead. That’s it. It’s meant to replace what’s missing – your financial contribution.

So here’s it is, 4 simple tips to have with you when shopping for life insurance protection for your loved ones.

Tip One: How is my rate (the total cost) determined?

    • Health. How healthy are you? Do you eat right? Have you taken care of your body through the years? Have you mercilessly abused yourself like a 20-something? The insurance carrier wants to responsibly hedge their bets and if you’re sick, you’re a bigger risk. So, the current state of your health does matter. There are, however, no medical exam life insurance coverage options.
    • Age. Typically, the younger and healthier you are the less you’ll pay. If you haven’t guessed, life insurance carriers have learned that younger people are the best bet. Another reason carriers like younger people is because they typically allow their policies to lapse. Who wins when this happens? You guessed it! The insurance carriers win – it’s a secret they like to hold tight.
    • Smoking. This is obvious, right? We are clear that smoking is bad for your lungs. If you don’t smoke – yahoo! If you’ve quit – well done you’re on the right track. If you do smoke you can probably guess that cigarettes open the door to all kinds of diseases, illnesses, and risk…for you and the carrier.Whether you’re a current or former smoker your rates can be higher. However, all hope is not lost, take a few minutes and watch our CEO help you understand how to get life insurance coverage as a former smoker.

  • Profession. Why would anyone care? Its life insurance! Don’t forget – mortality. If you’re a skyscraping window washer that’s a pretty risky job. Chances are if you’re in a risky profession you already know you take risks and have hopefully protected your loved ones. If there’s little to no risk in your profession, then this part should not impact your risk level.
  • Driving. Are you racing around the interstate like Mario Andretti? Driving under the influence? Drowning in citations, court dates, and fees? As you can imagine, all of these are problems because it’s all risky.
  • Travel Habits. If your idea of expanding your mind includes visiting far off places, tasting new foods and meeting new people – that’s great! And it’s all ok – low risk – until you start base jumping, visiting dangerous cities and snorkeling with the great whites on Seal Island.
  • Hobbies. Here’s the bottom line: If it’s risky, it will more than likely play a part in the cost of your life insurance. So, if in your spare time you enjoy quilting, reading, walking in the park you’re pretty low risk. On the other hand, if sky diving, snorkeling and racecar driving is just what your adrenaline ordered – you’ll likely pay more.

Tip Two: Does the cost depend on who you call?

Yes and no…there are two parts to this. First, understand that life insurance rates are based on mortality and risk. Each insurance carrier will have guidelines which outline what kind of risk they’re willing to tolerate. Some will be more comfortable with your health hurdles and some have zero tolerance for certain health issues. The secret lies in knowing which carrier prefers what, and that boils down to experience.

Here’s the NO

Let’s say you’re a 55-year-old diabetic male trying to get coverage.

  • You call ABC Life Insurance broker. You receive a quote with an A-rated carrier you trust.
  • With that quote in hand, you call that same A-rated carrier directly. Your quotes will be the same. Pick up that slacked jaw. It’s true.

What doesn’t change is the pricing table. That specific carrier’s price is the same no matter who you talk with.

Now here’s the YES

Looking at the same example…you’re a 55-year-old diabetic male trying to get coverage. If you compare prices with different carriers then you’ll see a price difference. Remember each carrier has different risk tolerances.

The best way to save time? Call a knowledgeable life insurance broker. An experienced agent is well-versed in the underwriting guidelines of several insurance carriers, not just one. So while the first A-rated carrier charges you a lot due to your diabetes, the second A-rated carrier might offer 25% less for the same coverage amount.

Tip Three: Can I just say I’m healthy and risk-averse?

We are living in the 21st Century. Nothing is done in a vacuum. When you fill out an application with a medical exam it triggers all kinds of checks on the backend. Your legal background, your credit, your job, your health – all of it is verified. You can’t lie.

If you do lie and are caught your application will be denied. And because the systems are all tied, the life insurance world knows you’re a liar. Not good.

Tip Four: What the easiest and most reliable way to shop for life insurance?

There are a few different ways to shop for life insurance.

  1. You go directly to each carrier and get quotes from each of them, then make a choice. There are about 22 A-rated insurance carriers.
  2. Go online and get insured digitally. Yes, this is real and you typically have to be young and healthy. Also, these options are usually term coverage only.
  3. Call an experienced broker that can shop for you. You’ll want to make sure they work with A-rated carriers so you have your choice of the cream of the crop. Basically, you tell them what you’re looking for and they will find the best deal based on your mortality and risk – and current health!

Shopping for life insurance doesn’t have to be frustrating or confusing. When you’re clear on the facts it makes shopping for life, easy. Now call us at 800-496-9083 and speak to a real person! (yes, we’re old school.) You have enough things to think about, so we’ve taken the stress out of shopping for life insurance.

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