Relatively speaking, how good is my life insurance quote?

February 28, 2007 9:49 AM

Help me determine how fair my life insurance quote is.

I received a quote from Fidelity for $1M 20-year term life insurance for $970/year. I'm pleased with Fidelity for other accounts so I figured I'd give them a shot for life insurance.

I have no real frame of reference to see if this is a fair bid. I'd rather not go through the application experience with other companies to get comparative bids-I'd like to know where my quote fits in the overall ballpark. Additionally, I'm supposed to respond to Fidelity's bid soon.

I've tried the online quickie-quotes but those aren't really meaningful.

I'm 35 years old, in fine health, great heart, etc. Not a smoker, not a pilot/cliff diver/etc. A red flag to Fidelity is that I recently lost a bunch of weight, and that affected my rating, thusly my premium.

posted by neilkod to work & money (6 comments total)

Mr. Sassy recently got a similar plan. No red flags for him and his rate is approx. $625/year. It's either through State Farm or Phoenix Wealth. Don't remember which we went with.
posted by Sassyfras at 10:10 AM on February 28, 2007

Also, it may be possible to argue against a substandard rate if you can provide documentation from your physician that the weight loss was the result of a healthy, purposeful weight-reduction plan.
posted by cortex at 10:21 AM on February 28, 2007

Cortex-are you implying that the rate is sub-standard?

FWIW, another strike against me is a prescription med that I'm taking.
posted by neilkod at 10:23 AM on February 28, 2007

We used selectquote. Fill in some basic info on their web site and somebody calls you back with quotes from 3 companies. What we got ended up being lower than stuff I had found on my own. I was surprised at how well it worked.
posted by selfmedicating at 10:29 AM on February 28, 2007

Not implying, speculating; you mentioned it as a red flag, is all, and I want to be sure you're aware that some of the onus will be on you to make sure their underwriting department isn't being too overly conservative in their rating. Didn't mean to spook you.
posted by cortex at 10:30 AM on February 28, 2007

While I'm sure you've already resolved this issue by now, working out to about $80 a month seems on target for someone of your age for that much coverage.

That being said, I'm not sure if 20 year term is the best way to go for $1m. If I were you, I'd do something like $300k 20y-term and then as much permanent insurance as you can afford (universal life or variable universal).

Keep in mind that after 20 years, the cost is going to SKYROCKET for this term policy. At least double, maybe triple. And it'll go up every year after that. Thus, you'll end up having to buy a new policy, at age 55, at the rates for a 55 year old.

It's good to have a lot of coverage for the next 20 years (especially if you have kids/spouse), but you need to have something after that for your spouse once the kids are out of the nest.
posted by PandemicSoul at 3:38 PM on March 11, 2007