How to Get The Best Rate for Life Insurance
When people first realize they need additional life insurance, their first thought is often “let me wait and try to lose a few pounds.” While admirable in intention, this is incorrect. By following the three steps below, you can help ensure that you get the best possible rate when you apply for life insurance.
1. Don’t Wait
This is — by far and away — the number one rule in the life insurance game. That’s because when you’re underinsured, you’re extending the window of time that unexpected illnesses, accidents, or even — you know — death have to strike. Health ailments from illnesses and accidents are often what precedes life insurance claims. That naturally doesn’t sit well with life insurance carriers, thus resulting in poor health ratings and denials to those applicants that have presented excessive risk.
To make matters even worse with waiting, life insurance carriers round your age up when considering your application. That means half birthdays matter (crummy gift, right?). This can be balanced out by paying extra premium up front to “save age.” This allows you to have your application assessed at your real age to save money on premium in the long run. That, however, is a more head-spinning topic for another article entirely. Bottom line — waiting is bad.
2. Use an Independent Agent
These insurance professionals are similar to insurance brokers in the sense that they can offer multiple products from multiple insurance carriers. Where they differ is the manner in which they’re compensated.
With independent agents, the insurance carriers take the hit for agent compensation. To many people’s surprise, this cost isn’t passed on to you. You’d pay the same price for the policy had you gone to an insurance broker, or even the carrier directly.
Independent agents are also much more reachable for policy servicing after the sale is made, as opposed to life insurance carrier customer service centers. Waits to connect to a customer service center can exceed upwards of an hour, especially during the COVID era. With an independent agent you cut through all that and work with the same familiar person that helped you to begin with. If working with an independent agent appeals to you, contact Lacey Life for help.
3. Let Your Agent Know the Worst Thing About Your Health History
This may sound a bit weird, but remember your independent agent is your friend. They are highly motivated to help you avoid underwriting pitfalls, because without an approved application, they can’t do their job — helping you get a policy!
Your health history will be uncovered anyway through a paramedical exam and, if necessary, requests for attending physician statements. It’s best to get that information in the hands of the one person that can steer the ship clear from disaster (i.e. — you guessed it — rate hikes and denials) before it’s too late.
After your independent agent is made aware of your greatest health risks, they will determine if these challenges merit additional caution. If so, your independent agent should be able to use their past knowledge of carrier risk tolerances to help decide which one will view your application most favorably.
If they aren’t sure, they should still be willing to contact their carriers’ underwriting departments pre-application for what’s called a “risk assessment.” This is essentially a carrier’s unofficial, best faith guess as to whether you would be approved and at what health rating. If the carrier’s underwriting department does not find your risk level palatable, it doesn’t hurt you (unlike applications that do get denied). The agent can then simply move on to the next carrier until a suitable match is determined.
Learn something?
Sure you hope you did! If so, please like, comment and share this article so others can learn and save money themselves. That goes a long way towards supporting future content and is deeply appreciated. Thank you for your readership, and until next time, please be well!
