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.
Life insurance has a ladder of rates depending upon your underwriting rating. The best underwriting score or rating will produce the lowest premium, while the worst underwriting score will produce the highest premium. If you are very healthy, have good height and weight, and you are a non-smoker, then you have an opportunity to get the best rating. You can get knocked down the insurance ladder for health issues, dangerous avocations, bad BMI, family history, etc.
We will take a look at a hypothetical case of a 40 year old male who is applying for 250,000 of 20 year term life. His best possible rating would be preferred best. If he receives this underwriting rating, the best premium on the market will be $19.79. If he gets knocked down to a standard n0n-smoker because of being too heavy, he will pay a premium of $39.06 monthly for the same policy. If he has multiple health risks and gets the bottom rung on the life insurance ladder, he will pay $122.50. While everyone would like to get the preferred best rate, it is unusual for someone to qualify for that rate. You must have zero negative underwriting points in order to get the preferred best. If you get the worst rating on the underwriting rung, I would suggest you accept the policy or have us shop the case to other carriers. If you are on the bottom rung, it means you are one step from being uninsurable. Even if it is more than you wanted to pay, it is still an offer for life insurance.
Similar to applying for a mortgage, you must be evaluated by the company, before an offer is made. We look at all the carriers on the market depending on where we estimate you will fall on the ladder. It is important to work with a good agent who can help guestimate the rating from their field underwriting with you.
