If you want to buy life insurance, you must first get a quote. But what is a quote and how can you get it?
Each life insurer will have a different pricing model, so even if you provide the exact same information to multiple insurers, you are unlikely to receive two identical quotes. When shopping around for life insurance, try to get as many quotes as possible to improve your chances of finding the best value life insurance policy.
How do you get an insurance quote?
Now that we understand what insurance quotes are, let’s look at the different ways you can get life insurance quotes for free.
Getting quotes through an insurance agent:
An insurance agent is someone who sells an insurer’s products for a commission. The agent helps you figure out which policy works best for your unique situation and provides you with a life insurance quote. If you buy the recommended product or policy, the agent earns a commission.
Although this method is simple, it has one main drawback. Your options are restricted to the offerings of one specific life insurance company.
Getting quotes through an insurance broker:
Unlike an insurance agent, a broker works with multiple insurers — typically three to five. This means you get more options when you work with an insurance broker than when you receive quotes from an agent. All the same, you are still restricted by the number of insurers your broker works with.
Getting quotes through an online broker:
No one can offer you more choices than an online insurance broker. For example, Dundas Life has access to policies from all the leading Canadian insurers and can help you find the right coverage for your family with ease. Time with an online broker is just one click away.
How do you choose between insurance quotes?
When selecting an insurance quote, there are a few things you should take into account.
- Coverage Amount: This is the amount of money your beneficiaries will receive should you die while the policy is in effect. Some policies have a level death benefit — that is, the payout remains the same throughout the policy’s duration. However, in the case of some policies, like universal life insurance, the death benefit may fluctuate.
- Coverage Term: This denotes the number of years for which you are covered.
- Price: As you may guess, most people compare life insurance quotes by price.
- Company Reviews: Online reviews, such as those provided by Dundas Life, help you compare different life insurers.
Types of life insurance quotes
There are two types of life insurance policies— term life and permanent life. Comparing and contrasting quotes will help you make an educated decision.
Term Life Insurance
Term life insurance covers you for a certain number of years, like 10, 20, or 30. It usually has a level premium and death benefit. If you die during the policy term, the insurer pays the death benefit amount to your beneficiaries. Compared to permanent life insurance, term life insurance is five to ten times cheaper.
Permanent Life Insurance
A permanent life policy lasts your entire lifetime, provided you pay the premium on time. Many of these policies also build cash value. If you buy a cash value policy, a part of your premium goes into keeping the policy in force while another part is funnelled into an inbuilt saving account. Once the policy has accumulated enough cash value, you can withdraw or borrow against it.
How many life insurance quotes should you get?
Four to six life insurance quotes will give you a fair idea of what is available and at what price. However, if you can get more quotes, that is even better. The more life insurance quotes you gather, the better chance you will have of ensuring you do not pay more for life insurance than you have to.
What affects quotes for life insurance?
Many factors — both personal and policy-specific — affect your life insurance quotes. Personal factors include your age, medical history, gender, and smoking status. Older people, or those with an underlying condition, receive higher premiums. Life insurance is more expensive for men than women, as women tend to live longer on average.
However, no single factor affects your life insurance quote as much as your smoking status. Tobacco use can push your rates two to three times higher (if not more).
What you need to know
The first step to buying life insurance coverage is to get a quote. There are different ways to get an insurance quote, but contacting an online broker, like Dundas Life, is the best way to go about it. Dundas Life works with all leading life insurers in Canada and can help you find the right policy at the lowest possible price.