Life Insurance Shopping Guide Chapter 3: How Do I Choose a Life Insurance Policy?

Make apples-to-apples comparisons to make sure you're choosing the right policy.

Colin Lalley 1600

By

Colin Lalley

Colin Lalley

Associate Content Director, Home & Auto Insurance

Colin Lalley is the associate content director of home and auto insurance at Policygenius, where he leads our property & casualty editorial teams. His insights have been featured in Inc. Magazine, Betterment, Chime, Credit Seasame, Zola, and the Council for Disability Awareness.

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You’re reading Policygenius’ 4-part guide to shopping for life insurance.

Click here for Chapter 1: Understanding Life Insurance

Click here for Chapter 2: How Much Does Life Insurance Cost?

Click here for Chapter 3: How Do I Choose a Life Insurance Policy?

Click here for Chapter 4: Applying For Life Insurance

Why should I compare life insurance quotes?

You might think that one life insurance policy is the same as any other. However, going with the first option without comparing prices could cost you big time.

Here are four real-life quotes for a 30-year, $500,000 term life insurance policy for a healthy 32-year-old:

CarrierMonthly Premium
Carrier A$34.36
Carrier B$36.02
Carrier C$42.88
Carrier D$47.98

That's a nearly 40% difference between the lowest and highest prices - or over $4,900 over the term of the policy.

How do I compare life insurance quotes?

So there's good reason to compare life insurance quotes to make sure you're getting the best deal. But how do you do it?

You’ll need to answer a few questions about your health and health history, and your health classification will be determined to help figure out the price of a policy for you from a given carrier. The older, unhealthier, or riskier you are to insure – for instance, if you smoke or skydive – the more expensive your policy will be.

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Most people decide based on price, but there are other qualifications you can use.

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An easy way to compare policies instantly is by comparing prices. As long as the policy fits your coverage and term needs, making sure it fits in your budget is a good place to start. After all, there's no point in having a policy if you can't afford to keep it active.

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Other ways to compare life insurance

If policy costs across insurance carriers are similar, you should also compare the companies themselves to differentiate them.

Is the company best for your health situation?

Not all companies treat health conditions equally. Some may offer better rates for people with diabetes, while others are cheaper for Baby Boomers. Make sure you’re going with a company that gives you the best possible price.

What riders are available?

Riders let you customize a policy so it fits your needs perfectly – but they’re not always available, and some cost money to add.

What can you do online?

Life insurance companies can be pretty old-school. Some let you update aspects of your policy online, while others require a phone call or mailing in changes. Choose a company that's most convenient for you.

How are the life insurance company’s ratings?

Looking at financial ratings from A.M. Best, industry ratings from J.D. Power, and consumer ratings from the Better Business Bureau gives you an idea of its standing and reputation.

Takeaway: Life insurance comparison checklist

Finding the best policy doesn't have to be complicated. Use these quick tips to compare life insurance policies and carriers:

  • Compare policy prices to save up to 40% on comparable policies

  • Understand which carrier is best for your health condition to make sure you're getting the best deal

  • Choose a company that works the way you do - whether that means online or by phone or mail

There are a few different ways to compare life insurance quotes. Since everyone's needs are different, it's most important to choose a policy and company you're comfortable with.