Life Insurance Prequalification

To find the best possible rates, consumers should understand the prequalification process as it relates to the life insurance industry.

Is prequalification free?

Yes. Prequalification should always be made available to you free of charge, without obligation. If your current broker charges a fee for prequalification, then you should look elsewhere.

Your broker should offer prequalification as a matter of course — as a matter of serving the consumer in the most responsible and ethical manner.

In this sense, prequalification is a “way of doing business,” rather than a separate service to be added on to the consumer’s bill.

What is a prequalified quote?

Very simply, a prequalified quote is not a guess or an estimate. It is an accurate quote based upon your risk profile – without the need for submitting a formal application.

There’s no formal application?

That’s right.

Why should I get prequalified?

Prequalification protects your life insurance application history, because you don’t submit a formal application.

A little background information is in order here.

As you may know, financial companies share your application history. For example, if you apply for a credit card and get turned down, then the next credit card company will be even more critical of your application. When judging the risk of new customers, the credit card companies take their cues from each other.

The same holds true for life insurance companies. For example, if you submit a formal application to one insurance company – and that company declines you – then, that negative information is placed into your application history. A tarnished life insurance application history can make it increasingly difficult to obtain affordable coverage.

Prequalification does not require a formal application. Therefore, your application history is protected from negative information.

Is prequalification difficult?

Not difficult for the consumer.

When properly done, prequalification requires significantly more work on the part of the broker. But, the consumer should not experience the additional difficulty.

What are the basic steps?

The process is straightforward. The broker prepares a thorough risk profile for the consumer, which he then presents to carefully selected underwriters. Each underwriter responds with his most competitive rate. In turn, the broker presents the best prequalified quote to the consumer. The consumer decides whether or not to accept the quote. Either way, the consumer’s application history is not affected.

Is this similar to mortgage prequalification?

It’s very similar.

For example, when you shop for a new home, mortgage prequalification tells you exactly how large a mortgage you can afford – before you make a formal bid on a house.

Being prequalified eliminates the guesswork. Everyone knows that the mortgage underwriters will approve the home buyer’s formal application. Everyone saves time and effort. Plans can be made with confidence.

What sort of rates are possible?

When properly done, prequalification dramatically increases the chances of finding excellent rates. To get an idea of the power of prequalification, please see our  life insurance quote database. Each case file represents a real person and a real quote. The database covers a wide range of risk factors.

How do I get prequalified?

Simply request prequalification from your broker (or request a quote from us).

But, be very clear with your broker. Say precisely what you expect – prequalified quotes without the submission of a formal application. Again, be sure your broker understands that you are not willing to authorize a formal application, until you are satisfied with the prequalified quotes received from the underwriters.