Three out of every ten Americans own no life insurance to support surviving family members, and many more are underinsured, according to the LIMRA insurance research firm. With almost 1,000 different life insurance companies operating within the United States, choosing the best insurance policy can be difficult. Are cheap life insurance quotes truly a good deal? This guide arms consumers with the key questions that lead to affordable, reputable life insurance.
Why Are Some Life Insurance Quotes More Expensive?
The price of life insurance is based on a complicated set of factors. Underwriting teams look at the applicant’s age, health, occupation, risky activities, and other criteria. At the same time, insurers must build in a profit to pay for their call center employees, salespeople, actuaries, underwriters, paramedical partners, marketing efforts, and support staff. For instance, a company that sells most of its insurance contracts online may be able to offer better pricing than a company that opens brick and mortar sales offices across the country.
Many insurance companies vary their pricing structures to attract a particular clientele. As an example, Company A may offer the best deals for insuring children because they represent a lifetime of insurance premiums. Company B may focus on low pricing for older adults and then sell related services to make up for the discounts.
Researching Cheap Life Insurance Quotes
Inexpensive life insurance rates can provide either golden opportunities or unsuspected disasters. A consumer looking at an offer for low premium payments should consider the following:
1. Is the company selling term life insurance or permanent life insurance? Term life is often the cheaper option because the policy does not accumulate any cash value and does not permit loans. Additionally, term life insurance lasts for a set period, such as 5, 10, or 30 years.
2. What is the death benefit? Insurance companies charge higher premiums for higher payouts.
3. Does the insurance require a medical exam or periodic renewal screening? Life insurance companies can lower premium costs if they understand the applicant’s health history and current health status. They are ultimately trying to determine how quickly they will need to pay a death benefit.
4. Are the cheap rates offered only to preferred risk customers, such as young non-smokers with no history of chronic illness? Consumers must be aware of organizations that advertise low rates but only accept a small percentage of people into those inexpensive categories.
5. What customer service options are available? Companies that operate mainly through the Internet can afford to provide cheap life insurance quotes because they are not paying commissions to sales agents. At the same time, scant services burden customers who have questions and must stay on hold for a long time or wait over a week for an email response.
6. Is the current price available only for a limited time? Life insurance prices typically start low for children and increase as a person ages. A 25-year-old applicant can buy insurance for less money than a 50-year-old.
7. Is the company financially stable? In other words, will the insurer still be in business in 30, 40, or 50 years to pay out claims? Some companies try to attract consumers with low rates and end up going out of business.
Ultimately, the key to getting the best life insurance deal is to shop around. By understanding their current requirements and their families’ needs after their death, consumers can select the best policies with little hassle. With a little research, savvy shoppers understand when cheap life insurance quotes are a bargain and when they are too good to be true. You can even check out different types quotes like whole life insurance quotes. Just get out there and shop around.