You will need to provide the following information in order for an independent insurance broker to generate premium quotes for you -
- State
- Gender
- Date of birth
- Coverage amount
- Term length
- Health condition
- Status in U.S. (citizen, greencard holder, or H1b visa holder)
You may be surprised to see a wide range of prices from different insurers
But without a more detailed application, most of these numbers are just guesses. Insurance companies employ actuaries who do nothing but crunch numbers to determine how to price insurance. The more information you provide upfront, the more accurate your quotes will be.
Learn your class: preferred, super-preferred, standard, or substandard
The insurance industry uses these broad groups to classify customers by risk. For example, if you are perfectly healthy, have a low body mass index (BMI), and do not have other risk factors (like smoking, dangerous activities, or a lousy driving record), you may meet the super-preferred class. By contrast, somebody who is overweight and has high blood pressure may only classify for the standard class and will pay more for the same insurance.
Although life insurance classes can provide broad guidelines of what you can expect to pay, every insurer works differently. For example, let’s say you have a hobby that insurance companies consider high risk – like flying a plane or rock climbing. Some insurance companies may place you in a lower class and charge you more for these “high-risk” activities. Another insurance company may insure you in a higher class, but place exclusions on your policy meaning you won’t receive a benefit if you die as a result of those activities.
In our next blogpost, we will discuss life insurance application process.