How to compare life insurance quotes

How to compare life insurance quotes

When doing a life insurance comparison of quotes online, by phone or through an agency or broker, you may want to consider a few key steps. Here’s how to keep things clear and to help steer you towards finding the best policy for your needs:

• Know what you need first: Are you looking for term life insurance that covers you for a specific number of years, or do you need permanent coverage that can last your entire life and builds cash value? Make sure the quotes you’re comparing are for the same type of policy with similar coverage amounts and term lengths. Otherwise, the price differences won’t mean much.
• Get quotes from multiple companies: Prices can vary a lot between insurers because they each have their own way of assessing risk. Gather quotes from several reputable companies, and don’t forget to check their financial strength ratings and customer satisfaction (look at J.D. Power, for example) to make sure they’re solid enough to be around for the long term.
• Dig into the details: The premium is just one piece of the puzzle. Look at the death benefit, any built-in features and optional riders that might be included. For example, when getting term life quotes, double-check that the term length matches across the board. If you’re looking at permanent life insurance, you might want to see whether it’s whole life (with fixed premiums and guaranteed growth) or something more flexible like indexed universal life, which can fluctuate with the market.
• Check the application process: Some policies require a life insurance protection.
• Talk to an expert: If all the options start blending together, a licensed agent or broker can help you sort things out. They can help explain the jargon, break down the pros and cons and maybe even help you find hidden discounts.

Types of life insurance policies

When it comes to life insurance, it’s important to compare apples to apples and not apples to oranges. A term life quote and a whole life quote might both be for life insurance, but they’re completely different products with different purposes, costs and benefits. Here’s a breakdown of the main policy types and what to watch for when you’re comparing quotes.

Term life insurance

permanent life insurance.

What to look for when comparing quotes:

• Match the term length and coverage: A 20-year, $500,000 policy is going to cost more than a 10-year, $250,000 policy, so make sure you’re comparing similar options.
• Check the renewal terms: Some policies let you renew after the term ends, but be ready for a potential price jump.
• Conversion options: Some term policies can be converted to permanent coverage down the road, which could be a difference maker if your needs change.

Permanent life insurance

Permanent life insurance lasts your whole life (up to a coverage age range of 95 to 121) as long as you keep your policy in good standing. Most permanent policies also build cash value over time, which you can borrow against to use while you’re still alive.

Here’s where it gets a little more complex because there are a few different types:

Whole life insurance

• What it offers: Whole life features fixed premiums, guaranteed death benefits and cash value that grows at a steady rate.
• What to compare: Look at things like dividend options (if it’s a participating policy), loan interest rates and how fast the cash value can grow, which can be shown on an illustration — ask an agent for one.

Universal life insurance (UL)

• What it offers: Universal life offers flexible premiums and adjustable death benefits, with cash value growth tied to interest rates set by the insurer.
• What to compare: Check out the current interest rate, the minimum guaranteed rate and how flexible the premium payments are. An illustration can be helpful.

Indexed universal life insurance (IUL)

• What it offers: Similar to UL, but an indexed universal policy’s cash value growth is linked to a stock market index (like the S&P 500), with limits on how much you can gain or lose.
• What to compare: Look at the participation rates, caps and floors and how the interest is credited. Seek an illustration.

Variable life insurance

• What it offers: Variable life lets you invest the cash value in sub-accounts, kind of like mutual funds. It has more growth potential — but also more risk.
• What to compare: Review the investment options, fees and the performance history of the funds. Ask for an illustration.

Final expense life insurance

This type of policy is designed to cover end-of-life expenses, like funeral costs. It’s usually for smaller amounts and may not require a medical exam.

• Match coverage amounts: These policies typically range from $5,000 to $25,000, so make sure you’re comparing similar amounts.
• Consider the underwriting: Some policies are guaranteed acceptance, which sounds great, but they might have a waiting period before the full benefits kick in.