Many of the quotes we hear are not accurate. A client will often get the best possible case scenario as a quote and truly expect to get that price. While it may or may not be possible for them to get that rate, we like to provide a range that we think it will fall in. For example, from the information that has been given to us we might guestimate a best case scenario and a worst case scenario. While it is not guaranteed to fall in that range, it is usually pretty accurate. The clients best case scenario with perfect health and underwriting might be Elite preferred. If they get a couple of black marks in underwriting then their worst case scenario would probably be standard non-smoker. The premium for the Elite preferred is that top of the range and the premium for the standard is the bottom of the range.
It is imperative for accurate quoting, to understand the potential clients current health and health history. It is also important to know if they have other factors that could knock them down, like bankruptcies and dangerous avocations. To give a quote without knowing these type of things is shooting a little bit in the dark. We want to help our clients get accurate quotes and a realistic perspective of where their policy will truly land. We would rather underpromise and overdeliver and surprise clients with a better rate than expected.
Remember a quote is a quote and an offer isn’t an offer until you go through underwriting.
When you are getting a whole life insurance quote, it is important to factor in several things. Are you buying enough death benefit, or should you supplement the whole life with a term rider? Should you overfund the policy above the premium to take advantage of the tax favorable nature of the cash value? If so, how much should you overfund the policy? Do you have disability waiver of premium included in the quote? Is it a good company with a long track record of good dividends.
These are important questions that should be asked as you get a whole life quote. Whole life is not a commodity like term insurance and it is important to pick a good company and to structure it the correct way. An inexpensive term rider can be included in the whole life plan, that will increase the death benefit. This rider can not only help you meet a higher exposure level, but also give you more term that can be converted to whole life later also. This is a good option to have once you understand the value of whole life. In regards to overfunding the policy, I would highly suggest it. The more you overfund the policy, the quicker it will grow. The money the is contributed to the cash value will grow on a tax-deferred basis and can be accessed on a tax-free basis if done correctly. The IRS has put a limit on how much you can contribute on each plan for a reason. They don’t seem to be very excited about plans that can be accessed tax free. I would suggest you take advantage of this benefit as much as possible.
The policy should have disability waiver of premium on it. This will waive your premium payment in case of a disability. If you can qualify for this rider, it is really valuable. Also, it is critical that you select a good mutual company with a great track record of paying dividends.
In order for you to get a valid quote for life insurance, you need to give the field underwriter (the agent) as much information as possible. I see these advertisements that say, if you are a 40 year old male, you could get 500,000 dollars of life insurance for 22 dollars or whatever. This is based on absolutely the top underwriting classification. In other words, you can get this if your health is absolutely perfect.
You need to realize that a quote is simply an estimate of what the premium will be after underwriting. After underwriting, each applicant will either be declined or receive an underwriting rating. This underwriting will be either preferred, standard, or table rated. This is why we ask several questions, before we give a quote. We want our clients to go into underwriting with a realistic expectation. If they complete underwriting and the rating is better than we had quoted, then they are happy. When you are looking to get your next quote, make sure that you have provided all of the necessary information. Anything relating to health, medications, avocations, family history, tobacco use, etc. needs to be disclosed. If you don’t you will probably be in for a disappointment when you actually apply for a policy.
You can see that the Swine Flu seems to be everywhere in the news today. Did you know that the World Health Organization has raised the threat level of the Swine Flu from epidemic to even a Pandemic? Many Florida residents are taking strides to be proactive during the crisis by searching for term life insurance. Paramount Life Insurance, a life insurance advisory group, said “The W.H.O believes a global outbreak of the disease is imminent, and people’s knee jerk reaction is to go online and search for life insurance” Have you checked your life insurance policy lately? Read more here…