One of the biggest mistakes people make when purchasing a life insurance plan is not comparing quotes from multiple insurers. It can be easy to think that all insurers use the same methods to calculate a quote; so all quotes will be similar. This way of thinking could be costing you 70% extra on your quote, as every insurer’s rate assessments of risk may be slightly different. For some people this can make a huge difference to the premium price, especially over the full length of policy.
When Brand Loyalty Backfires
It’s very common for generations of families to choose the same insurer that their parents and grandparents did. Brand loyalty is a powerful draw; after all we’ve seen our families choose policies that provided for their needs from these insurers for many years. So why is this a bad thing?
The simple answer is that you are not the same person as your relatives, you have different coverage needs and you also have a unique medical history. Keep in mind that a life insurance company will base your quote premium on a health rating class. To assign you a class they assess your age and health conditions to calculate your policy premium. Every insurer has their own system that determines which rating class you fit into. So one insurer could put you into the best class and one could put you into a much worse one.
Here’s an example based on real life quotes*:
Dan is 47 and in good health with no major medical issues but he smokes over 12 cigars per year. He needs a $1 million term life policy that lasts for 10 years.
Received from the insurer Dan’s family have used for years. This insurer considers Dan a tobacco user and uses the tobacco rate to calculate his quote. They return a quote of $5,445.00 per year.
Received from an alternate insurer. This insurer doesn’t consider Dan a tobacco user with those few cigar’s and calculates Dan’s quote based on the non-tobacco rate. They return a quote of $1,418.00 per year.
Using the example of these real life quotes from comparable insurers Dan could have saved 73.9% if he chose a policy from the alternate insurer. Over the life of the policy Dan would save over $40,000.
Finding the Best Policy For Your Budget and Your Needs
This is just one scenario where you could be overpaying for insurance and a perfect example of why you should compare quotes from multiple insurers. IntelliQuote’s online quote gathers quotes from a range of the best-rated insurers helping you find the best value plan that fits your needs and your budget. Our experienced licensed agents for can assist you with selecting the best option for you. Compare quotes today to see how much you could save on life insurance!
*Quotes based on 47-year old male (Date Of Birth = 7/7/1970), who smokes more than 12 cigars per year. This quote was run on 8/10/2017