The first step of any life insurance shopping process is getting term life insurance quotes. Getting quotes usually gives you a pretty good idea of how much you’d actually pay for life insurance from a particular company. But once you get those quotes, are you committed to actually buying life insurance from that company?
Short answer: no. You can get as many quotes as you want from as many life insurance companies as you want for free. You never have to commit to buying from any of those companies if you don’t want to. (Once you do identify a quote you want to take action on, work with an independent life insurance agent to make sure it’s the best fit for you.)
In fact, you can pause the life insurance shopping process at basically any point up until you actually sign your policy. Here’s what you can with absolutely no financial obligation on your part:
Get life insurance quotes
Apply for life insurance
Go through underwriting, including your free medical exam
Ask an agent any questions you may have
You can go through this entire process, actually get a life insurance policy sent to you, and then get cold feet at the last moment and refuse to sign the document – all without any financial penalty. (Although it would be a huge waste of time and you’re still leaving yourself and your family to some major financial risks in the future..)
Why is this possible? It all has to do with how life insurance is bought and sold. Most life insurance is not sold directly by life insurance companies – instead, agents and brokers act as intermediaries between insurers and customers. Agents are typically contracted with multiple life insurance companies, although some are "captive agents" – the only work with one company, like State Farm.
Agents are free for shoppers to work with because they’re paid directly by life insurance companies. You might think that’s worse than paying an agent directly, but it actually works in your favor. Life insurance prices are regulated by the states, and insurers work costs like marketing and commissions into the price of every single policy they sell. If you were to pay an agent for "unbiased" advice, they will still get paid a commission from the life insurance company, and you would be paying twice for their advice.
By the way – because life insurance prices are regulated by states, no agent or broker can promise you cheaper rates. Your life insurance policy will be the same price no matter who you buy it from.
Because you’re not paying anything to the agent or insurer during the shopping or application process, you can get quotes from a variety of companies, shop around for the best prices, and, if you need to, quit the process or put it on hold without paying a dime. (Need help comparing quotes? We have a tool for that.) In the end, that’s better for consumers because it allows the shopping process to be a lot more flexible.