Using the power of the Internet when shopping for life insurance can be a time and money saver. However, it is important to avoid being carefree when assessing quotes online. Exercising due diligence when comparing online quotes among insurance can help anyone maximise the benefits of shopping around for life insurance.
♦ Be informed before comparing
Life insurance buyers should estimate their insurance need and do basic research into the type of plans available. Once life insurance buyers commence shopping around, they should be informed and be able to compare and contrast different plans from the same insurer or among different insurers. It is important to know the similarities and differences among plans in the two broad classifications of life insurance – permanent and temporary life insurance.
♦ Ensure that the information necessary for accurate quotes is available
Before beginning to compare quotes, persons should have as much relevant information as they can – the most important being medical history, family medical history and financial information. While insurers use similar methods, one would find that some request more details for online quotes than others. The more accurate information persons can provide, the more reliable their quote would be. The accuracy of the individual life insurance quote enables fairer comparison among insurers.
♦ Compare like with like
At the most obvious level, one should not compare a whole life plan with a universal life plan. Although they both are cash value plans, they have different permutations. One must ensure that the plans compared are the same (or at least very similar). This is especially important because insurance companies offer different plan structures for the same plan type. For instance, one insurer might have a 10-year term insurance plan while another offers a five-year term insurance plan. Insurers also have different optional supplementary benefits. When comparing quotes among insurers, it is important for buyers to compare the same benefits.
♦ Look for the best value, not the lowest quote
The lowest life insurance quote is not often the best one. Life insurance is a long-term financial product. Buyers must ensure that the type and amount of life insurance selected provide the best value. In assessing a life insurance quote, factors other than the premium are important. Optional supplementary benefits available; the financial strength and reliability of the insurers (AM Best/ Standard and Poor’s rating); and customer service are also important considerations.
♦ Further investigate your options offline for better comparisons
Online quote-comparison should enable buyers to reduce their options to two or three insurers. Calling the company or seeking the help of an insurance representative from each company can help you to validate the quote. Sometimes, the actual rate is different from the quoted premium rate because of more detailed or new information on the application.
A life insurance quote is not an offer on the part of a life insurer. It merely gives a person an estimate of the cost of purchasing a particular plan with a specific insurer. When comparing quotes, the most important tips are to look for the best value and compare the same plans with similar benefits among different insurers.