Why Should I Compare Term Life Insurance rates?
The Insurance Industry is highly regulated by States. Policy contracts must be approved by the State Insurance Commissioners and therefore are virtually identical from one company to another. Since the policy language, provisions, terms are exclusions are the same from one company to the next, there is no reason to pay any more than necessary so shopping for the best rate is always recommended.
What does “Term” mean regarding Term Life Insurance?
The policy “Term” is the period of time for which the premium is locked in level. A 10 year Term would have the premium locked in for 10 years while a 20 year Term will have the premium locked in for 20. The longer the Term, the more expensive the premium since it is guaranteed to remain level the entire period.
Why is a Medical exam required?
In order to qualify for the very best rates in the individual market, the life insurance company wants to ensure that the applicant is a good risk, or in other words healthy and free of major illness or disease. The only way for the companies to determine that is to require applicants to undergo a light exam which includes providing blood and urine specimens, vitals and medical history questions.
How do I know what Rate Class I am?
Part of the underwriting process is for the company to determine what rate class the applicant is. Each rate class carries with it certain requirements such as Height/Weight, Medications, Family History, and other medical conditions. A more detailed explanation of Rate Classes is provided here (LINK)
Are there things other than health issues that can affect my rate class?
YES! There are many other things that can affect rate class such as Driving Record, Citizenship, Foreign Travel, Hazardous Activities (Aviation, Vehicle Racing, Mountain climbing for example), Criminal history, and drug use to name a few.
Do all of the companies use the same underwriting criteria?
NO! if you are asking yourself this question, congratulations, it’s a very astute and important one! This is one of the main ways that we can help you determine which company will be the best “match” for your personal profile and medical history. Many of the requirements vary quite a bit from one company to the next and a person who might qualify for the top rate class with Company A may not with Company B. It is why spend time on the phone with each and every client to obtain the necessary information we need to help find a company with whom they will get the very best rate. Twenty years of experience and direct dealings with the underwriting departments of all the companies allows us to offer this level of expertise.
Do I have to pay money with the application?
No, none of the companies require any prepayment of premium, UNLESS you want coverage to be binding during the underwriting process. An applicant may go through the entire process with no money down and no obligation, and decide upon approval and review of the policy whether they would like to accept the policy and put it in force.
How are premiums paid and are there any discounts?
Once you have decided to accept your policy, you may then also decide how you would like to pay the premiums. Generally, most companies offer payment modes on an Annual, Semi Annual, Quarterly, and Monthly basis. There is a surcharge applied for the Semi Annual, Quarterly and Monthly modes. In other words, the Annual premium is the cheapest, and it will cost you slightly more for any of the other modes. When a premium is quoted on a monthly basis, that surcharge is already built in so you will notice it is more than simply dividing the Annual premium by 12. For monthly payments, all companies require it be set up on an automatic bank draft from a checking account. You can elect to receive bills for the Annual, Semi Annual and Quarterly modes, though some companies will allow you to set those up on automatic bank drafts as well. Generally speaking, most companies will not allow payment by credit card, though there are a small number that do.
How Is My Age Determined?
Most companies round your age up to the nearest 6 months. In other words, if an applicant is turning 30 years old on December 1, they are considered 30 years old after June 1, as they are then closest to age 30. There are a couple of companies who do base their premiums on Actual age, but they are the exception.
How Does Smoking affect my policy?
Generally, any form of tobacco use will impact rates. There are a few companies who are very favorable with cigars and chewing tobacco. We can review your specific details to find a company that will be best suited.