Following the rules, I scoured the interwebs to see who fit the bill. I did not visit individual brokers like State Farm, MetLife, or John Hancock. However, I did discover quote-finding websites that didn’t follow these rules. So, what do we do with rule breakers? Exclude them from the prize category at the end of this article.
What Kind of Data Do They Need?
All online life insurance forms wanted to know a little about me before giving out a quote for a term life insurance plan. Insurers will look at demographic data, then put me in an underwriting class. This is a fancy way of assigning a probability as to how likely I am to die during the coverage period of my insurance.
Insurers also want to know about my health history. Major health problems will increase premiums, and a history of no health problems will decrease premiums.
Finally, insurers need to know if I have habits and hobbies that are more likely to cause my untimely death. You know, things like skydiving and scuba diving with Great White Sharks (with or without a shark cage, it doesn’t matter). Each website I visited wanted a different amount of data. I strongly favored those companies that needed less info at the beginning of the quote process, because I want to quickly narrow my choices of top competing bids.
Resource: How to Ensure That Your Life Insurance Proceeds are Tax-Free
Here are examples of the three areas in which insurers collect data:
Demographics – Height, Weight, Birthdate, Coverage Amount, Term Length
General Health History – Questions like this:
Life Habits – Check the box if you live on the wild side.
For my research model, I’m going to play the role of a 40-year-old male with no major-medical history. No DUI’s, no traffic tickets in the last 5 years, and no dangerous activities… all things actuaries are looking to put in their magical calculations to guess how soon I’ll die. Hypothetical Me will live somewhere in the United States and want $1 million in 10-year, term life coverage.