Life insurance comparison: How to tell a good quote from a bad one

Recognising the importance of being accessible, many insurance companies have made life insurance quotes instantly available for potential policyholders. These are usually accessible online, and consumers can browse the cover policy of interest and study its details before deciding on the one option. As a person may wind up with a rather long shortlist, identifying the very best quote can be difficult if he or she lacks relevant information on life insurance.

Identifying needs and goals

It pays to do your homework before approaching different insurance providers for quotes on life cover. a person can start by exploring the basics of life insurance, such as the types of cover available and their features.

After doing the groundwork, the person should next assess their financial needs and budget for insurance. For example, a person who has dependents and who wants to remain insured until the children graduate from college might find term life insurance, spanning approximately 20 years, to be adequate. However, those with an eye on long-term planning and have post-retirement concerns might find longer-term life insurance more suitable.

Planning finances in this manner allows a person to select the quote that is the best fit easily, that is, by comparing how premiums, coverage and duration of a quoted policy conform to pre-set requirements. This is especially important when you consider how a cheap quote may mislead a less-informed person into purchasing cover that may not be their best option.

Compare apples with apples; not oranges

Due to the time taken to source for quotes from difference insurers, many people tend to leap for the first quote they obtain, which is actually counter-productive. Instead, it is better to acquire a number of quotes from different insurance providers before making a detailed comparison.

Different products should be compared based on similarities, whether in terms of coverage amount, scope, duration, or whether the rate is subject to review during renewal. Based on these guidelines, a person will be able to identify a good quote, i.e., one that meets the needs and specifications.

In this instance, a bad quote is not something that will result in financial ruin, but it certainly would not provide the cover a person needs. This means the policyholder can wind up paying more and for a policy that does not provide adequate cover.

With whom are you dealing?

A good quote usually comes from a reputable and credible insurance provider, which tends to be evident from its financial strength. An insurer with good financial standing is most likely to offer a good quote; it is not necessarily cheap but is reasonably priced, and you will get what you paid for. Thus, seeking out the financial ratings of the insurers of interest can net a person much better quotes.

Feedback is also helpful; it pays to seek opinions from friends and relatives, or even colleagues, or read customer reviews regarding the services offered by these insurance providers. Factors to investigate include the insurer’s efficiency in processing claims and its approach to addressing customer problems and queries. This extra research is advantageous in that it allows a person to eliminate a bad quote from a poorly rated company quickly.

The terms and conditions will always apply

A person must read the fine print after narrowing down the sheaf of quotes obtained to a select few that meet the requirements. It is important to study the terms and conditions involved, especially the terms for cover for which “special offers” have been quoted. The premium quoted may be low, but that does not necessarily mean that the policyholder will receive the best value from the policy. Indeed, low premiums may be offset by less comprehensive cover or be subject to terms such as mandatory, stringent review upon renewal. Therefore, a cheap quote can be a bad quote in that the policyholder might be deprived of a life cover policy’s full benefits.

Consider an advisor

It can be beneficial to seek guidance from a qualified insurance adviser whose main role is to advise on the most suitable product rather than closing a sale. An advisor is the person to whom all queries can be posed, following which the potential policyholder should have the knowledge necessary to differentiate a good quote from a bad one. Additionally, an adviser will also be able to explain insurance jargon, and the terms and conditions involved. Advisors can also advise on a person’s financial situation in order to identify that person’s criteria for what constitutes a good quote.

Purchasing good life cover policy begins from acquiring the best quote. It does not pay to rush into a decision or be tempted by price alone without considering other factors that define a good quote. It is only prudent to equip yourself with the relevant knowledge and information when you look for life cover.