How come I see two different prices for the same insurance plan? I got two quotes from two different brokers.
Answers | 3
Confusing, to say the least, right? Here is very likely what is happening when you get two different prices for the same plan. Elemental to the quoting process for all sellers of insurance is assigning a rate class (sometimes referred to as a health class). Think of rate classes as "brackets." If you are a Preferred Plus risk (Preferred Best with some carriers), you fit a bracket for price. Other rate classes are Preferred, Standard Plus, and Standard. On Standard rate class approvals, where there is significantly impaired health, we see "Table Ratings" that increase the cost from there. Preferred Plus is the least expensive rate class.
At the quoting stage, we can send you numbers that reflect our best guess (!). Or, we can do better than that: we can ask you questions in an attempt to uncover info that tells us which bracket you should likely be in so that your numbers will then match your responses. Example: you are healthy in all other ways but tell me that you have High Blood Pressure and have had it for at least 5 years, controlled with a declining dosage of a given medication. Using that info alone, LifeInsuranceToday,US will send you a Preferred set of numbers because the carrier tells us that you will likely qualify for that rate class.
Remember that quotes do not tell underwriters (who approve your coverage) how to price your coverage. Better quotes that are accurate and meaningful are the result of work done by your advisor at the early stages, when you are gathering numbers. The more you tell me the more accurate I can make the numbers, and even then I might give you both a "worst case" and a "best case" set of numbers so you can see the difference and not be surprised later.
Summing it up: the difference of quoted numbers can be a result of how sellers assess your risk and then assign a rate class. When the assessment is not done well, or not at all, you get a rate class and numbers that don't apply to you. When they are different for the same plan you can get confused. Be wary of numbers that come to you without any questions beforehand relating to health conditions, medications, motor vehicle records, etc., since the numbers will be based on mostly nothing at all.