Your life insurance rate doesn't match your quote: Now what?

Colin Lalley 1600


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.

Published April 7, 2017 | 5 min read

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You recognized that you need life insurance. You went through the application process, the medical test, the waiting. Then you get your proposed rate,’s a lot more expensive than you were expecting.What gives? You thought instant online life insurance quotes were pretty accurate, right?They usually are. If you filled in your application to the best of your knowledge, what likely happened is something health-related was uncovered during the underwriting process, increasing your premiums.If this happens to you, don’t give up. About 20% of life insurance applicants get a modified offer during the process – something that’s different than they were expecting – so it’s not an uncommon occurrence. Working with a broker like PolicyGenius means that you can get extra mileage out of that substandard rating and still get the financial protection your family needs.

How life insurance ratings work

In order to understand how you got a substandard rating, it’s probably helpful to know what a rating is.Also called classifications, a life insurance rating is essentially a measurement of how risky you are to insure, based on how likely you are to die during your policy’s term. The life insurance company uses data gathered during the underwriting process to make this assessment. It’s mostly made up of health data – your current health, your family health history, and any potential future health issues (for example, obesity can increase your risk of diabetes) – but also things like any risky hobbies and your driving record.An underwriter compiles all of this information and, based on carrier guidelines, gives you a rating. A Preferred Plus rating is the goal. The next highest rating would be Preferred, then Standard Plus, and Standard.And then there’s the Substandard classification. It’s also called a table rating, because this classification is made up of a series of ratings that get progressively worse as you step down the table (ie, an A rating is better than a B rating, but both are substandard).Where this really becomes an issue is when you take into account that your rating affects how much you’ll pay for your life insurance premiums. Preferred plus applicants pay the best rates, while applicants with a substandard rating pay the most, usually calculated by increasing the standard rating premium by a certain amount.If you get a substandard rating and think that, since you can’t afford the sky-high premium rates, life insurance isn’t for you, think again. You still have plenty of options out there, and PolicyGenius can help.

Understand your rating

Got a rating that was worse than you were anticipating? Find out why.Many different factors go into your rating, and any one of them can lower it. Depending on what caused the drop, it could be helpful to know just for the purpose of living a healthy life. For example, if a health condition was uncovered during your medical exam blood test, you probably want to be aware of it.It can also help you secure a better rating in the future. Some things, like certain lab tests and your weight, can be reassessed after a certain amount of time to help lower your premiums; if you know that weight issues are what caused your rating to lower, you can commit to improving your health, lowering your weight, and reassessing your policy later.

Work with a broker or agent

You’re on the PolicyGenius site, so there’s a good chance you’re already doing this, or you’re at least considering it. That’s good, because we can attempt to get you better premiums – and do all of the legwork for you.Some agents – called captive agents – only work with a single insurance carrier. PolicyGenius works with two dozen of the nation’s top-rated carriers, which means you have options when it comes to where you get your policy. We can work with all of these carriers and shop your underwriting results around, comparing offers from multiple companies.It’s important to note that you can’t get a better deal by going straight to carriers themselves, and the price for a given policy at a given carrier is the same across the country. They even have the cost of using an agent or broker built in. You won’t save by doing the heavy lifting yourself, so why not let PolicyGenius do it for you?If you take a look at our life insurance company reviews, you’ll see that some companies are more accommodating with some conditions than others. If you’re getting an unfavorable rate, you may be able to get a better one elsewhere. Your underwriting profile will be compared to various carriers’ underwriting manuals – their guidelines for how to rate underwriting outcomes – to see if there’s a better fit for your results.Once we start shopping your policy around, it becomes like a financial version of those old choose-your-own-adventure books.

If there’s a better opportunity out there…

Congrats! We found a carrier who’s likely to be a better match for your specific situation and give you a better rating. That’s great. We’ll work with the second carrier to secure the better offer. In the meantime, we can also lock in your rates with the first carrier; in the rare chance that something falls through with an alternative carrier, you can rest assured that your original rates won’t go up even more.The best part? You won’t have to retake the medical exam when we find a company that’s a better fit. They’ll use your existing underwriting profile, so you won’t need to go through that weeks-long process again.

If there isn’t a better opportunity out there…

Even if there isn’t a better fit for you, there’s no need to fret. We can still work with you to get a different policy that fits your budget. Lowering the coverage amount and/or term length will lower the cost of your policy. It may not be the exact policy you wanted, but it’s still some level of protection.We can also help you go from one policy to multiple policies. "Laddering" policies of staggered term lengths and various coverage amounts is often cheaper than buying a single full-term policy, so you can get the coverage you need that’s more within your price range.

Don’t wait to get life insurance

A substandard rating isn’t an excuse to not get life insurance. You have options now, and by putting it off all you’re doing is leaving your family unprotected.And remember, you’re not bound to a life insurance policy forever. If things take a favorable turn in the future, you can always adjust your policy or reapply so your wallet’s as happy as you are.