Everyday hundreds if not thousands of people visit one life insurance website after another comparing life insurance quotes on the modern consumer quoting systems. Are these quoting systems accurate in the premiums they display and do they show consumers a comprehensive list of insurance companies and their life insurance rates? The answer is they sure do and the public appreciates using them. Do they always show the consumer an accurate breakdown of realistic premiums, this answer is not always and this article will go into detail why they in many cases do not always hold the value people put into them.
What actually is a life insurance quote and should we always rely on them to be realistic numbers?
A life insurance quote in reality is just a quote which is another word for an estimate of cost. When a person who is interested in applying for life insurance receives a quote, all they are getting is just an estimate of what the final premium will be. Many variables can come into the picture and change the final numbers if an application is actually submitted to a life insurance company for review. This is the same principal if a person has an accident with their vehicle and they receive an estimate from their local automotive body shop. The damage on the vehicle can be estimated but the final cost can change when more damage is located when the car is taken apart. This concept holds true in many businesses today.
Let’s take a look at exactly what can change a quoted premium when the application arrives in the underwriting department.
Your health history is number one on the list of concerns.
The first and normally the most important factor is the applicant’s health history. Even if a medical pre-screen is performed by your agent you premium could change one way or another. This could be caused by information collected on the initial application, a MIB report which stands for Medical Information Bureau, your driving record, a telephone interview, a Para-med Nurse visit or medical records requested from your doctor’s office or hospital. Another factor is a routine prescription drug report that reveals all the purchases of drugs you made at your various drug pharmacy.
Hazardous occupations that could take your life are another interest the underwriters have to consider.
Hazardous occupations for example may be Farmers & Ranchers, Truck Drivers, Iron Workers, Commercial Fisherman, Loggers, Garbage Collectors, Roofers, Operating Engineers, Roofers, Coal Miners, Commercial Underwater Divers, Airline Pilots, Power Line Installers, Firefighters and the list goes on and on. These are all the most likely occupations that could trigger a fatal accident resulting in a death claim on a life insurance policy. Affordable life insurance can still be obtained by people with these high risk occupations.
Dangerous sports activities and hobbies.
Many people do not take their hobby or preferred sport into consideration but this area of concern is very real and has a major impact on a person’s life insurance application. Just some of these sports and activities are Mountain Climbing, Hand Gliding, Scuba Diving, Sky Diving, Drag Racing, Motorcycle Racing, Drag Boat Racing, Bungee Cord Jumping, White Water Rafting, Rock Climbing, Para Gliding and the list goes on. These types of sports and hobbies can cause a fatal accident resulting in a death claim payout far exceeding the odds of a natural death.
Your parent’s health history is also taken into consideration.
The overall health of your parents has to be questioned to see if there is any evidence of genetically transferred health conditions such as Cancer or Heart Disease which could be handed down to the applicant. These conditions mainly come into play if an applicant’s parent or parents died prematurely from one of the two medical conditions which actually rank number one and number two on the list for the most likely causes of death in humans today. If one or more of your parents died prematurely from a given disease the life insurance companies have to take this under advisement.
You driving record is also considered when applying for life insurance.
Life Insurance companies run motor vehicle reports to review an applicant’s driving habits. Needless to say that if you have a history of driving while intoxicated, speeding or reckless driving, this could lead to a fatal motor vehicle accident. Highway deaths are high on the list of the most common causes of death in the United States and must be taken into consideration.
Here are some of the downfalls people make when running a consumer life insurance quoting tool. Make sure to read this very important paragraph.
The most common mistake made is the average consumer has no idea what rate class to choose from the quoting tools drop down menu. The normal default setting is “Preferred Plus” which applies to people who are in the very best of health. Approximately 10% of applicants will qualify for this rate class. The common scenario is a person reviews preferred plus rates and this same person could very well be 75 lbs. overweight, have high blood pressure, high cholesterol and never seen a doctor in 10 years, but they are comparing all of the preferred rates.
Consult an experienced insurance professional and ask for help!
Instead of consulting an experienced life insurance agent who can help them they continue wasting their time going over and over quoting systems from one website to another, either insurance carrier or agent’s websites. Many of the consumers never do apply for life insurance but they make an actual hobby of kicking tires and running quote engines. Needless to say that this has no benefit for their dependents who are in harms way if the individual meets their demise.
Always keep in mind that a life insurance quote is just that. It is simply an estimate on what the premium can be if you apply.
Life insurance company underwriters make the final judgment call on the final rates and they do not even consider what rate class is listed on the application. They go by the hard facts and just the facts. The normal turnaround time for an application is usually between 30-60 days. A lot of consideration and research goes into each and every application that comes across their desk. I hope this helps you to understand what is involved in the application process and what is the true meaning of a life insurance quote.
All the information provided in this article was contributed by Jack Venturi of BestChoiceLifeInsurance.com.
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Jack Venturi is the owner of BestChoiceLifeInsurance.com and is a licensed Insurance Broker with more than 25 years experience specializing in all forms of life insurance products. You may learn more about him at BestChoiceLifeInsurance.com
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