Life insurance can provide financial support for your loved ones if you pass away unexpectedly. It can help protect family members from financial stress and ensure important obligations like housing, child care, and education are costs your family can still manage. The first step in getting covered: getting a life insurance quote. It can help you understand what a policy might cost and explore options before buying.
What is a life insurance quote?
A life insurance quote is an estimate of what a specific life insurance policy might cost you based on your personal information. It's tailored to you, so you will need to provide your age, health, lifestyle, how much coverage you're applying for, and how long you want that coverage to last.
Insurers use this information to calculate a preliminary price, referred to as a quote. While a quote isn't a final offer, it can give you a useful starting point to compare options and understand potential costs. If the information you provide is accurate, the final premium you will pay is usually close to the initial quote, but it may change after the insurer completes its underwriting.
How to get a life insurance quote
Getting a life insurance quote can be done in just a few minutes. Follow these steps:
- Search for online insurance quote tools, such as Fidelity's term life insurance quote tool. You can try individual insurers' or brokers' tools to help estimate your quote.
- Answer a few basic questions to get a quote in just a few minutes. Many insurers also offer quotes over the phone if you prefer to speak with a representative, and you can also work directly with an agent for more personalized guidance.
- Look beyond price. Check out potential insurers' reputations and financial strength. Independent rating agencies like A.M. Best, S&P Global Ratings, Moody's Investors Service, and Fitch Ratings regularly assess insurance companies and publish financial strength ratings which help evaluate an insurer's ability to pay claims over time. Review customer feedback and complaint history too. Websites like the Better Business Bureau can highlight patterns of customer concerns, helping you spot potential issues before pursuing a policy.
What goes into your life insurance quote/rate?
A life insurance quote reflects personal information. These details help insurers get a sense of your overall health and life expectancy.
- Age: In general, younger applicants tend to pay lower premiums because they are typically healthier and are expected to live longer.1
- Sex: On average, women tend to live longer than men. Because of this, women often get lower rates, all else being equal.2
- Height and weight: Being significantly underweight or overweight for your height is associated with increased risk of conditions such as diabetes, eating disorders, heart disease, and cancer, and this elevated risk can lead to higher insurance costs.3
- Health history and medications: You may be asked about current conditions, past diagnoses, and prescriptions to fill in the blanks about your health.4
- Family health history: Some conditions can run in families, so insurers may ask about close relatives to better understand possible future health risks.5
- Lifestyle choices: Certain habits, such as smoking and drinking alcohol, are linked to higher health risks, which can affect pricing. Even some hobbies, such as rock climbing or flying planes, can increase prices because of their potential dangers.6
- Occupation: The job you have can raise your rate if there's an increased risk of getting hurt, as there is with construction and manufacturing. Office jobs, in contrast, do not typically raise the cost of life insurance.7
- Driving record: DUIs, DWIs, and other serious traffic offenses can indicate a higher level of risk and may lead to an increase in your insurance quote.8
Does the type of life insurance impact your quote/rate?
Yes, the type of life insurance policy you want affects your rate.
- Term life insurance covers you over a specific period, or term, such as 10, 20, or 30 years. If you pass away during that term, your beneficiaries receive a payout. If the term ends and you still need coverage, you may need to renew or buy a new policy, often at a higher cost. Some insurers allow you to convert your term policy to a permanent whole life or universal life policy without needing to reapply.
- Whole life insurance provides coverage for your entire lifetime, as long as you continue paying the premiums. These policies typically feature fixed premiums and a guaranteed death benefit, along with a cash value component that builds over time, which you may be able to borrow against. While whole life is generally more expensive than term life, it is important to consider its long-term value, as the guaranteed cash value component can grow over time and be accessed during your lifetime.
- Universal life insurance offers lifetime coverage as well, but with more flexibility. You may be able to adjust your premium payments and coverage amount over time, depending on your needs and how the policy performs. It typically costs less than whole life, which usually has higher guaranteed returns.
Riders are extra features which can increase your insurance premiums. One example of a rider lets you access part of the death benefit early or pause premium payments if you qualify under certain medical conditions.
How to compare life insurance quotes
It's a good idea to get quotes from several insurance companies. To make a fair comparison, share the same information each time you request a quote and look at similar policies (e.g., whole or term).
Once you have a few quotes, check out each policy's:
- Coverage amount: How much money will your beneficiaries receive, and will it realistically cover major needs like debts, income replacement, or future expenses such as education or housing?
- Premium: Will the amount you pay regularly (monthly or yearly) to keep your life insurance policy active stay the same, or can it increase over time?
- Health requirements: Will you need to complete a medical exam, and how might your health information affect the final price compared to your initial quote?
- Conversion flexibility: If you're considering term life, can you switch to a permanent policy later without reapplying?
- Expenses: Does the quote include any administrative fees? If not, how could those additional costs affect what you pay over the life of the policy?
- Insurer: Research potential insurers' reputations and financial strength. Independent rating agencies such as A.M. Best, Moody's, and Fitch assess insurers and publish financial strength ratings that can help gauge their ability to pay claims over time. Also review customer feedback and complaint histories. Resources like the Better Business Bureau can reveal recurring concerns and help you identify potential issues before pursuing a policy.