Hi Brian. Good question!
First, let’s point your question to term insurance only, since permanent plans can be daunting (and sleep inducing) to “unpack” and compare.
A friend was trying to compare two CUSTOM homes, different and priced differently, too. Because this was an “apples to oranges” comparison, it was difficult to say which was the “best” one, and cost was less useful as a way of sizing them up leading to a final decision. Term insurance (without added riders) are not custom designed. We are talking about simple policies where premium is paid - and when someone leaves the planet someone else receives a death benefit. With term, the price can be used to cut to the chase.
Two homes (term policies) are exactly alike, on the same street, but one is priced higher. There is a difference in price, but not a difference in the items themselves. So, you buy the least expensive one. You are done.
One term quote: you can see 5 different carriers on one spreadsheet, showing lowest to highest cost. Each carrier is rated A+, so you have 5 A+ rated carriers. The rating
tells you about the claims paying history and investment profile of each. Given that all are A+, we can say that except for price they are virtually no different. You choose the
least expensive one. You are done – unless you…
Go and get a BUNCH OF QUOTES! If you have read several responses in the last 10 days at MoneyTips.com, you’ve read that all carriers publish one price for a plan; Protective Life’s 20 year term, preferred rate class, 250K face amount is the same price no matter where you go to get it. So, a BUNCH OF QUOTES later, you discover that Protective Life’s 20 year term, preferred rate class, 250K face amount is the same price no matter where you go to get it. Transamerica, too? Yep. John Hancock? Yep. Getting this 5” stack of info took 2 hours of your life to compile, plus talk time (your ear has yet to recover). And, it gets worse, because now you’re totally confused.
Solution: start with what is most important – before you attempt to use cost as the most significant determinant for making a choice – get a better sense of what it is that you need. Let’s say you need 30 year term, 250K. Stick with that as the basis of all quotes so you don’t get 10/15/20/25 and 30 year quotes for 6 different face amounts! Speak with a couple of professionals and get a 5 carrier view of what’s available from them. Your pros will tune you in on the right rate class for you. They can help you determine the need, too. In fact, I am pretty good at that after helping thousands with those same issues over a number of years.
Seems you can afford the recommended plan. It’s the right plan, so now it’s time to buy. Buy from the person with the best advice. Buy from the person who asked you questions about what matters most to you, not them. You are done.
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