Term Life Insurance Quotes: How to Get Them and What Happens When You Apply

Short answer: To get term life insurance quotes, decide how much coverage you want and for how long, then get quotes from several companies for that same coverage. The Texas Department of Insurance (TDI) says “Rates vary by company” and that the cost “depends on your age, health, and risk factors.” A quote is a starting point: when you apply, the insurance company underwrites your application before it decides whether to sell you a policy.

How does term life insurance work?

TDI says “Term life insurance offers protection for a set period of time.” Your life insurance company “will make payments after your death to the person you name in your policy,” TDI says.

This article covers getting quotes and applying. To choose among companies, read how to compare term life insurance companies. For how age affects price, see term life insurance rates by age.

What is a term life insurance quote based on?

A quote is based on details about you and the policy you want. TDI says:

• “The cost depends on your age, health, and risk factors.”
• “A company can charge you more if you have health conditions, smoke, or have risky hobbies.”
• “Your premium will also depend on other things, including the amount of coverage and policy features you choose.”

The Washington State Office of the Insurance Commissioner (OIC) adds: “Your health history and life choices, such as smoking, play a key role in determining the cost of your policy.”

So expect to be asked your age, coverage amount, term length, health history and tobacco use. Ask the agent what other details the company needs.

Why compare the same coverage amount and term across companies?

Because prices can differ for the same coverage. TDI says “Get quotes from several companies. Rates vary by company.” The New York State Department of Financial Services (NY DFS) says “Prices for the same coverage can vary significantly among companies.”

A quote for a different amount or term isn’t a fair comparison. TDI’s advice is to compare “apples to apples”: “Be sure the policies you compare offer similar coverage.” The NAIC says to “compare similar policies from different companies to find which one is likely to give you the best value for your money.”

TDI also cautions: “Don’t choose a policy on price alone.”

Is the quote the price you’ll pay?

Ask the agent. Your final premium depends on underwriting. The California Department of Insurance (CDI) defines underwriting as “The process of evaluating applicants for insurance and classifying them fairly, so the appropriate premium rate may be charged.” In its glossary, CDI says applicants with more favorable characteristics may be classified as “Preferred Risk,” and “When the characteristics are less favorable, the applicant may be characterized as ‘Rated’ or refused coverage altogether.”

TDI says “A company can refuse to sell you a policy if it considers you a high risk because of your health or other reasons.” Before you apply, ask: “Which risk class does this quote assume, and what happens to the premium if underwriting puts me in a different class?”

What happens when you apply for term life insurance?

Here are the steps the regulators describe:

1. You fill out the application. The NAIC says “You can apply for life insurance through life insurance agents, the mail, and online.” The Washington OIC says “Insurance companies can require you to answer health questions to buy life insurance.”
2. You answer every question truthfully. The NAIC says “It’s important to tell the truth on the application,” and “The insurance company will check your answers so review the application before you sign.” CDI says: “Never sign an incomplete or blank form, or anything you don’t understand.”
3. The company underwrites you. TDI says “Insurance companies use a process called underwriting to decide whether to sell you a policy,” and it often includes “passing a medical exam and answering questions about your health, job, and habits.”
4. You may have a medical exam. The NAIC says “Depending on the type of policy, the insurer may require you to see a doctor, answer health-related questions, or have a medical professional come to your home or office to assess your health.” The NAIC says traditional underwriting can include “a physical exam and fluids testing (blood, urine, and saliva).”
5. The company may check outside records. With accelerated underwriting, the NAIC says some insurers use data from external sources, “like prescription drug history and motor vehicle records,” as well as “credit reports, motor vehicle records, and the Medical Information Bureau.” The NAIC adds that some applicants “will still need to complete the traditional underwriting process, including the physical exam.” Our guide to life insurance without a medical exam and how accelerated underwriting works explains these options.
6. You wait for a decision. For traditional underwriting, the NAIC says “The timeline from the start of the application process to the issuance of a policy can be up to a few months.”

What is the MIB, and can you see your file?

The Consumer Financial Protection Bureau (CFPB) lists MIB, Inc. as a consumer reporting company. It says MIB “Collects information about medical conditions and hazardous avocations” and reports it “to life and health insurance companies with your authorization.”

If MIB has a file about you, the CFPB says “it will provide one free report every 12 months if you request it.” The CFPB says you can dispute inaccurate information with MIB and with the company that supplied it.

Why do honest answers matter after the policy is issued?

The NAIC says “If the insurance company discovers false statements on your application after it issues your policy,” “it could reduce or cancel your coverage.” TDI says “Life insurance policies have a two-year contestable period,” and “If the company learns you gave wrong information or didn’t disclose something, it can deny payment.”

What is the free-look period?

The NAIC says you can return a new policy “for a full refund within a certain period, usually 10 days after you receive it,” and that “The review period usually is stated on the first page of the policy.” TDI says “Texas policies have a free-look period of at least 10 to 20 days.” The Washington OIC says “Every new life insurance policy issued in Washington state comes with a 10-day free look period.”

If you’re replacing coverage, the NAIC says: “Don’t cancel your current policy until you get the new one.”

How do you check the company and agent?

TDI says: “Make sure the agent and company are licensed to sell insurance.” TDI’s website has a “Look up a company or agent” feature, and its help line is 800-252-3439. The NAIC says to “Check with your state insurance department to verify that the company is authorized to do business in your state.”

Checklist: what to have ready and what to compare

The bottom line

Term life insurance quotes are based on your age, health, risk factors and the coverage you choose, and TDI says rates vary by company. Get quotes from several companies for the same coverage and term, ask which risk class each quote assumes, answer the application truthfully, and use the free-look period to review the policy.

A licensed agent can go over your options with no obligation. Here’s how calling RestAssured works.

RestAssured is not an insurance company or an insurance agency; we connect callers with independently licensed insurance agents.

Frequently asked questions

How do I get term life insurance quotes?

The NAIC says you can apply for life insurance through agents, the mail and online. The Texas Department of Insurance says to get quotes from several companies and make sure the policies you compare offer similar coverage.

What information do you need for a term life insurance quote?

TDI says the cost depends on your age, health and risk factors, plus the amount of coverage and policy features you choose. Have your coverage amount, term length, health history and tobacco status ready, and ask the agent what else the company will ask.

Is my term life insurance quote the final price?

Ask the agent which risk class the quote assumes. The California Department of Insurance says underwriting classifies applicants, and an applicant with less favorable characteristics may be ‘Rated’ or refused coverage altogether.

How do you apply for term life insurance?

You fill out an application, and the company underwrites it. TDI says underwriting often includes a medical exam and questions about your health, job and habits, and the NAIC says to review the application before you sign because the company will check your answers.

How does term life insurance work?

TDI says term life insurance offers protection for a set period of time. Your premium is based on the factors TDI lists, including your age, health and the amount of coverage you choose.

Sources

• Texas Department of Insurance: Life insurance guide
• NAIC: A Consumer's Guide to Life Insurance
• NAIC Consumer Insight: Want to purchase life insurance? Tips to help you through the process
• NAIC: Accelerated underwriting
• Consumer Financial Protection Bureau: MIB, Inc.
• California Department of Insurance: Life insurance guide
• Washington State Office of the Insurance Commissioner: Learn how life insurance works
• New York State Department of Financial Services: Purchasing life insurance

This article is for general education. Policy features, prices and eligibility vary by insurance company and state; your agent will explain the specific terms of any policy before you apply.