How To Compare Life Insurance Rates

compare life insurance rates

How to Compare Life Insurance Rates

One of the most common questions regarding buying life insurance for you or your family is how to choose the best insurance policy for your needs. Many people immediately jump to comparing life insurance rates and choose to opt for either the cheapest or most expensive option available. 

However, just looking at the dollar figure does not help as much as people think it does. There are several factors that should be accounted for when it comes to life insurance policies.

Choose the Type of Life Insurance to Buy

Before you can start comparing life insurance quotes, you will need to determine what type of life insurance you are looking to purchase. There are two main types of life insurance available:

  • Term Life Insurance: This type of life insurance only covers a limited time period (usually in intervals of 5 years) and does not allow you to build cash value. The longer the term, the higher the life insurance quote. However, despite this fact, term life insurance quotes are significantly lower on average when compared with permanent life insurance. If you die within the period of the term, the insurance company pays out money to your beneficiaries. Once the policy expires, you can choose to buy a new policy or reconsider the options available to you.
  • Permanent Life Insurance: This option costs significantly more than term life insurance. However, it also comes with several additional features. These include the ability to build tax-deferred cash value and the ability to borrow against this cash value. There are several different types of permanent life insurance, including:
    • Whole Life Insurance: This is perhaps the most expensive type of life insurance. This is because it offers a guaranteed rate of return on the cash value. Furthermore, you also have the opportunity to earn dividends from the insurance company and can take advantage of fixed premiums.
    • Universal Life Insurance: Offers lifelong coverage. It also offers you flexibility so that you can adjust your monthly premium payments and the amount paid as death benefits based on changing needs.

The type of life insurance you choose will significantly impact the amount you will pay in premiums. If you start comparing quotes without being aware of which option is best for your needs, you may find yourself comparing term life insurance quotes to permanent life insurance quotes. 

Doing so will be ineffective, as you may choose the cheaper option without understanding exactly what you are signing up for. 

Determine How Much Life Insurance Coverage You Need

The next step in the process is determining how much life insurance you need. This is not a number you can simply pull out of thin air. Without proper planning, you may find that you are underinsured. This can cause problems for your heirs in the case of your death.

In order to determine how much life insurance would be appropriate for your needs, there are several steps you can try. Most life insurance companies have a calculator on their website that can help you determine what coverage you need. You can also use the calculator available at for a quick answer.

Another option you have is to work with an insurance agent. They will be able to guide you on what factors you should consider when determining a coverage amount. They will also be able to answer any questions that you have about this process.

When determining how much coverage is appropriate, most calculators and insurance agents will ask you about your current financial resources. They will also ask you to consider what financial obligations you would want to be covered in the case of your death. These obligations can include everything from end-of-life and medical costs to tuition for your children, income replacement for your family (especially if you are the main breadwinner), and a general inheritance that you may like to leave to your heirs.

Some people may also have an existing life insurance policy that is provided by their employer. It is always better to buy an additional policy. This is because policies provided by your job are rarely enough to cover all your family’s financial needs. Furthermore, this policy will usually no longer apply in the case of a job change. 

However, you may want to take this policy into account when considering the coverage amount for your personal policy. An insurance agent will be able to guide you when it comes to this consideration.

Keep Other Details in Mind

Aside from the factors mentioned, several other details can make a difference when comparing life insurance policies. Some of these include:

  • Whether the policy offers fixed premiums
  • Whether the insurance company will return your premium at the end of a policy if a payout was unnecessary
  • Whether the policy you are choosing is guaranteed renewable – that is, whether your insurer will be obligated to renew your policy after expiration.
  • Any exclusions that the policy may have. Exclusions are the cases in which your insurer will not provide coverage. For example, many insurance policies have exclusions in the case of suicide or if your death happens while you are under the influence of drugs or alcohol.

You should determine what factors are deal-breakers for you. For example, you may decide to avoid a policy with a more affordable premium if it is not a guaranteed renewable policy. 

Knowing what elements you require in a policy will make choosing a life insurance policy easier. When you compare quotes, you will more easily be able to eliminate policies if they do not fit your requirements.

Gather All the Information You Need

As you start to compare life insurance rates, make sure you have all the information that an insurance company may require. You should be ready to answer questions regarding your medical history and your family’s medical history. You may also be required to provide access to your medical records or complete a medical exam. 

Compare Companies

Once you have all the information ready, you can start looking at life insurance quotes.

There are several ways you can do so. One of the most common ways is to first compare life insurance companies. You should be able to trust that the insurance company you choose will be able to pay out claims years in the future. By comparing companies to find the ones with the best track records, you will be able to find a starting point on buying life insurance. 

You can also compare each company based on customer reviews. Several times, you can glean valuable information about a company’s practices, as well as how easy filing a claim is with them, based on what people say online. Many insurance company websites offer space for customer reviews. You can also check the company’s reviews on third-party websites like The Better Business Bureau.

Another way to compare companies is by checking with credit rating agencies. These agencies will help you determine the financial stability of each company. You will want to select a financially stable company. This is because financial stability increases the likelihood that they will be able to pay out your insurance claim in the future.

Finally, make sure the life insurance companies you’re considering are licensed by your state. You can determine whether the company meets this requirement by checking the National Association of Insurance Commissioner’s website. You can also consult with your state’s insurance commissioner’s website.

Compare Policies

Once you have decided which companies offer you the best security, check for policies that fit both your needs and budget. The company should be able to provide the coverage you need while also offering premiums that are within your budget.

Make sure to check for any extra discounts that may be available. One way to do so is to check the additional savings feature that each company offers. Discounts may be available for things like organization memberships, multiple insurance policies from the same company, and more. You may also be able to get discounts based on your profession (if you are a teacher, in the military, etc.). Furthermore, some providers will offer you discounted rates if you make lifestyle changes. These include quitting smoking, changing to a safer career, improving your overall health, and other behaviors.

Make sure you are comparing relevant policies. For example, comparing term life insurance costs to permanent life insurance costs is not an effective method. Make sure you are comparing policies that offer the same coverage and length of time so that you can look at the quotes side by side.

Keep in mind that life insurance premiums vary based on your health. This is because insurance companies determine premium rates based on life expectancy. Anything that can reduce life expectancies like older age or serious illness, will result in higher premiums.

This means that applying for life insurance while you are young and healthy will help you see lower life insurance premiums. 

Shop Online

Working to manually compare life insurance rates can be both challenging and time-consuming. Everyone may not be able to account for this amount of time when comparing quotes.

However, it is possible to reduce the time involved when it comes to comparing rates. One way to do so is to compare life insurance rates online. There are several websites that allow you to make these comparisons easily. One convenient website that you can use is All you need to do is fill in some basic information, including your zip code and your coverage needs. Once that is done, the website provides you with custom results to answer your requirements, and you can easily start comparing quotes online. 

Review Your Policy

An important part of shopping for life insurance is reviewing your policies every few years. This is relevant for several reasons – for one, you may want to change the beneficiaries on your policy. However, life insurance quotes can also change over time. Companies may offer greater benefits in the future, and changes to your health and lifestyle may allow you to pay less in premiums. 

By comparing life insurance quotes every few years, you ensure that your policy is able to fit your changing needs. This is especially important if you have a term life policy, as these policies will need to be renewed or replaced upon expiration. 


You may find that you have many other questions regarding choosing a life insurance policy. To help you with these, can also connect you with qualified insurance agents. 

These agents will be able to answer any further questions that you may have, so you can be assured that you are making the best decision possible to protect your family and dependents.