A crib sheet to reading life insurance quotes

Jeanine Skowronski


Jeanine Skowronski

Jeanine Skowronski

Former Head of Content at Policygenius

Jeanine Skowronski is the former head of content at Policygenius in New York City. Her work has been featured in The Wall Street Journal, American Banker Magazine, Newsweek, Business Insider, Yahoo Finance, MSN, CNBC and more.

Published February 6, 2018

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Featured Image A crib sheet to reading life insurance quotes

To save on life insurance, you need to compare life insurance quotes. And to compare quotes, you have to understand them. Unfortunately, life insurance lingo isn't exactly part of our everyday lexicon. We can help you quickly pull and compare life insurance quotes across major carriers. Here's a crib sheet to reading them.

  1. Coverage refers to how much money gets paid out to your loved one(s) if you die. That amount is also known as the death benefit.

  2. Term refers to how long your policy is in effect. Your coverage kicks in if — and only if — you die during that timeframe.

  3. There is life insurance that lasts until you die. It's called permanent insurance; you can learn more about it here.

  4. Premium is the amount of money you pay for the policy. Most quotes — including ours — default to showing your monthly premium, but you can pay (and often view) premiums annually, too, at a discount.

  5. Level premium means the cost of your policy won't increase during your term.

  6. Underwriting Class refers to your life insurance classification, which is a fancy way of capturing how at risk of death a carrier considers you.

  7. The underwriting classes from best to worst (or lowest to highest premium) are: Preferred Plus, Preferred, Standard Plus, Standard and Substandard. You can learn what goes into determining them here.

  8. You might alternately see Non-tobacco or Tobacco listed as your underwriting class. That refers to whether you use the stuff. Tobacco users receive higher rates than non-tobacco applicants.

  9. Most quotes included basic information about each carrier, including, of course, its name, market share and the year it was founded. You should also see its A.M. Best, Better Business Bureau and J.D. Power ratings.

  10. A.M. Best ratings measure a carrier's financial strength (read: how likely are they to go out of business) on a scale from A++ to D.

  11. BBB ratings are based on customer feedback and provide a window into a carrier's customer service.

  12. J.D. Power ratings measure a carrier's customer satisfaction, product quality, and buyer behavior on a scale of 5 (the best) to 2 (the rest).

  13. Price is important but you also want to review a policy's features, especially if you have specific needs. Say you want the option to convert a term life policy into a whole life policy when it's set to end. You'll want to make sure the company offers that particular rider.

  14. Riders provide additional coverage or options. Most are add-ons that up a policy's price, but sometimes a rider is built into a policy. Popular life insurance riders include the accelerated death benefit and disability waiver of premium.

  15. Other considerations include accepted payment methods, exclusions, value and cancellation policies.

  16. Compare apples to apples if you decide to pull quotes from a variety of sources. In other words, the policies you're measuring against each other should have the same coverage, term and riders.

  17. Be honest about your health. Otherwise, your quotes won't be accurate — and you'll get a big surprise after your medical exam.

  18. Quotes won't go up or down depending on your sources. Or, if they do, the change is often negligible — or based on different health information the quoter collects. Legally, premiums must be based on a carrier's pre-established rate tables, and you can't get a cheaper rate by buying directly from a carrier.

Need more details? You can find a full explainer on how to compare and buy life insurance here.

Image: People Images