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How Your Life Insurance Quote is Determined

Life insurance plays an important role in protecting your loved ones from financial burden. Single or married, in your 20s and 30s or older, with kids or without, most people benefit from some level of life insurance.
However, the perceived cost often holds people back from buying a life insurance policy. It’s assumed life insurance is expensive. A misconception that’s untrue for many people.

How are Life Insurance Quotes Determined?

The process of getting a life insurance quote is simple. You’ll start by filling out a questionnaire. This helps your SelectQuote agent provide a side-by-side comparison of prices from highly reputable insurance companies. Your SelectQuote agent will help you find a plan that works for you. Once you select plan, you’ll undergo a mini-medical exam. The life insurance company then conducts its underwriting process and delivers your final price.
When completing the underwriting process, insurance companies look at a variety of factors. Your cost depends on the likelihood you will die during the term of your policy. It also factors in how long you’re expected to pay into the policy through premiums. Underwriters use the following factors to determine your rate classification.

What Life Insurance Companies Review When Determining Rate Classifications

  • Age. It’s cheaper to buy life insurance when you’re young and healthy. In the eyes of an insurance underwriter, you’re less risky. That’s because the likelihood of you living a long life and paying into your policy remains high. If you’re young and concerned about affording life insurance, adjusting your eating habits is a great way to budget for the cost. And if you’ve already seen your 40th birthday, don’t fret. Other factors play into your rates as well.
  • Gender. Women live longer than men. On average, five years longer. Therefore, gender alone can help you save on your life insurance premiums.
  • Physical Condition and Medical History. Your life insurance medical exam will look at your current health status and your medical history. Underwriters will also look at your family medical history since genetics can play a part in your risk. When reviewing your health information, they look for signs that you may have a shortened life. Indicators such as a high BMI, nicotine use, high blood pressure, or a history of cancer or other diseases may put you in a lower classification. However, that doesn’t mean you can’t get affordable insurance if you’ve had some health issues. SelectQuote works with cancer survivors, diabetics and individuals with heart disease (three health issues that often make finding insurance difficult) to get the best policy for their needs.  
  • Hobbies, Occupation and Driving Record. You may be asking yourself what these three things have to do with getting a life insurance policy. High-risk hobbies, such as bungee jumping and skydiving, elevate the chance of an untimely death more than say a hobby like knitting. Electrical powerline installers have a higher risk than an accountant who spends her day at a desk. Someone who is reckless with their driving may also be reckless with their health. Each of these items serves as an indicator and can impact your life insurance classification.

Get the Best Quote

The interesting thing about life insurance … your rate classification can change depending on the life insurance company you buy through. One insurance company may place you in a Preferred classification, offering you better rates, while another could classify you as Standard Plus. That’s why working with a trusted agent is so important.
By working with a licensed SelectQuote life insurance agent to shop a network of preferred insurance companies, you can find the best, most affordable quote for your needs at any life stage.
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