The online quote process might seem like a barrier to getting whole life insurance. Unlike term life, finding a whole life insurance quote can come with more health questions, required medical exam, or may even require you to talk with an agent. That’s because whole life insurance is a type of permanent life insurance. Insurers want to make sure who they’re speaking with and that you’re getting the right policy before committing to insuring you for as long as you choose to keep the policy.
That doesn’t mean reviewing a whole life insurance quote is impossible. Below we’ll look at whole life insurance quotes more in-depth and what it is like to get them.
- What Are Whole Life Insurance Quotes?
- What Affects Whole Life Insurance Quotes?
- How to Get and Compare Whole Life Insurance Quotes?
- How do Whole Life Insurance Quote Quotes Compare with Similar Term Life Insurance Quotes?
What Are Whole Life Insurance Quotes?
A whole life insurance quote is simply an estimate of what you’d expect to pay in monthly or annual premiums if you sign up for a whole life insurance policy. It can also outline aspects like dividends, cash value, and total death benefit growth.
As mentioned above, whole life insurance itself is a type of permanent life insurance, which means it stays in effect as long as you pay the premiums as planned. This doesn’t mean you have to pay premiums for the rest of your life. Several whole life insurance companies offer policies that you can pay premiums for 10, 20, or 30 years only and still have lifelong coverage. You do not need to renew it, risking higher premiums. According to the Insurance Information Institute, you might also see it listed as ordinary life insurance.
This type of insurance is the most common type of permanent policy. It has both a guaranteed death benefit and a guaranteed cash value account. You pay premiums for a certain death benefit and the savings account grows as the insurance company pays dividends into the account. Dividends typically hit at a set schedule.
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What Affects Whole Life Insurance Quotes?
There are many different factors that can affect how your premium displays on a whole life insurance quote. They include:
- Age: The older you get, the more of a risk you are to insure, as health problems can increase with age. The riskier you are to insure, the higher your premiums.
- Gender: Premiums are higher for men than women because men have a shorter life expectancy.
- Tobacco use: Tobacco use can put you more at risk for certain health conditions like lung cancer.
- Personal health history: The fewer health problems you have or have had, the lower your premiums because you are less of a risk to insure.
- Family health history: If you have certain medical conditions in your family, that could make you prone to the conditions as well and more of a risk to insure.
- Prescription history: These are often used to verify that you were accurate in relaying your health history.
- Lifestyle habits: A common factor is also if you have dangerous hobbies or a risky profession. For instance, if you work in high-rise construction and scuba dive on the weekends, that could make you more of a risk to insure because you have a greater chance of accidental death.
- Driving or criminal records: If you drive or live recklessly, that puts you at risk for a premature death, which can also make you a higher risk.
- Credit: Perhaps the most surprising feature is that certain credit habits can tie into mortality rates, so insurers look at credit attributes as well. For instance, if you have ever filed for bankruptcy, that can often be linked to high medical bills.
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How to Get and Compare Whole Life Insurance Quotes?
In order to get a whole life insurance quote from a company, you often must talk directly to an agent. The agent will be able to help you compare quotes from a few companies as well. Shopping around with several insurance companies and comparing quotes are critical to get the best quotes for you. If you want to learn which companies offer whole life insurance, consider our guide to the best whole life insurance companies.
We have two sample quotes from Penn Mutual and Mass Mutual.
The background factors we entered in include:
- Death coverage or face value of $300,000
- For a male 40 years old living in California
- Good health, standard plus no tobacco. This means that the person doesn’t smoke cigarettes and is in general in better shape than others. He exercises a few times a week and follow a healthy lifestyle and diet.
- Paying premiums for 20 years only, from 41 to 60 years old
- Need to have death benefit guaranteed of $300K for the whole life
- 100% dividend to buy paid-up additions
- Default return rate by each carrier
- Having living benefit rider in case of terminal illness
For this particular individual and the policy design details as described above, Pen Mutual offers a cheaper quote at $6,297 a year; Mass Mutual’s quote is more expensive at $7,083 a year.
Both quotes offer the following benefits:
- A guaranteed lifelong death benefit coverage of $300,000, ie. if this individual passes away at any time after the policy becomes active, his beneficiary will receive a payout $300,000, tax-free. Remember that he only pays annual premiums for the first 20 years of the policy.
- Both quotes detail the guaranteed amount of cash value account at the end of each year of the policy.
- If this individual suffers from terminal or chronic illness that meets the standard requirements, the insurance company will pay out $6,000 a month (2%* $300,000 = $6,000).
- Both quotes offer dividends. However, dividends are non-guaranteed. It depends on how the two companies perform during the life of the policy. If actual dividends turn out to be as expected in the quotes, final death benefits are significantly more than $300,000 as outlined below. However, since these dividends are not guaranteed, death benefits are not guaranteed, either. Remember that whatever happens, even if the insurance companies make losses in each year of the life of the policy, they still guarantee a death benefit of $300,000. Non-guaranteed death benefit means that it could be more than $300,000 if the insurance companies perform as well as they expected.
| Year of Plan | Age | Penn Mutual | Mass Mutual |
| 1 | 41 | – Base contract premium: $6,297 – Total guaranteed cash value: 0 – Dividend: $570 – Total non-guaranteed death benefit: $300,570 | – Base contract premium: $7,083 – Total guaranteed cash value: $1,251 – Dividend: $849 – Total non-guaranteed death benefit: $303,657 |
| 5 | 45 | – Base contract premium: 6,297 – Total guaranteed cash value: 16,239 – Dividend: 1,360 – Total non-guaranteed death benefit: 315,969 | – Base contract premium: 7,083 – Total guaranteed cash value: 18,189 – Dividend: 1,212 – Total non-guaranteed death benefit: 320,682 |
| 10 | 50 | – Base contract premium: 6,297 – Total guaranteed cash value: 47,439 – Dividend: 2,136 – Total non-guaranteed death benefit: 348,374 | – Base contract premium: 7,083 – Total guaranteed cash value: 48,510 – Dividend: 1,976 – Total non-guaranteed death benefit: 348,731 |
| 15 | 55 | – Base contract premium: 6,297 – Total guaranteed cash value: 81,270 – Dividend: 3,233 – Total non-guaranteed death benefit: 389,997 | – Base contract premium: 7,083 – Total guaranteed cash value: 85,086 – Dividend: 3,296 – Total non-guaranteed death benefit: 388,624 |
| 20 | 60 | – Base contract premium: 6,297 – Total guaranteed cash value: 121,629 – Dividend: 4,575 – Total non-guaranteed death benefit: 441,971 | – Base contract premium: 7,083 – Total guaranteed cash value: 128,712 – Dividend: 4,579 – Total non-guaranteed death benefit: 438,722 |
| 21 | 61 | – Base contract premium: $0 – Total guaranteed cash value: 125,640 – Dividend: 4,725 – Total non-guaranteed death benefit: 453,406 | – Base contract premium: $0 – Total guaranteed cash value: 132,765 – Dividend: 4,044 – Total non-guaranteed death benefit: 447,860 |
| 30 | 70 | – Base contract premium: $0 – Total guaranteed cash value: 165,594 – Dividend: 6,634 – Total non-guaranteed death benefit: 557,649 | – Base contract premium: $0 – Total guaranteed cash value: 172,119 – Dividend: 6,756 – Total non-guaranteed death benefit: 543,193 |
| 40 | 80 | – Base contract premium: $0 – Total guaranteed cash value: 214,488 – Dividend: 11,613 – Total death benefit: 699,615 | – Base contract premium: $0 – Total guaranteed cash value: 218,547 – Dividend: 10,955 – Total death benefit: 679,150 |
| 50 | 90 | – Base contract premium: $0 – Total guaranteed cash value: 256,173 – Dividend: 19,470 – Total non-guaranteed death benefit: 896,487 | – Base contract premium: $0 – Total guaranteed cash value: 258,222 – Dividend: 16,661 – Total non-guaranteed death benefit: 849,535 |
| 60 | 100 | – Base contract premium: $0 – Total guaranteed cash value: 276,924 – Dividend: 29,353 – Total non-guaranteed death benefit: 1,175,944 | – Base contract premium: $0 – Total guaranteed cash value: 300,000 – Dividend: 16,742 – Total non-guaranteed death benefit: 1,048,765 |
At age 90, if this insured needs emergency cash, he can borrow up to $256,173 from his Penn Mutual whole life insurance policy, and up to $258,222 from his Mass Mutual policy, providing that the two companies have performed well as expected. They have paid dividends as planned each year of the policy.
If he passes away within the year of borrowing, his beneficiary will receive $640,314K (=$896,487-$256,173), minus some interests payment for the loan and fees from his Penn Mutual policy; and $591,313 (=$849,535-$$258,222), minus some interest payment for the loans and fees, from his Mass Mutual policy.
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How do Whole Life Insurance Quote Quotes Compare with Similar Term Life Insurance Quotes?
To see how the above premiums compare with 20-year term life insurance quotes, we obtained a couple of quotes from comparison sites with similar terms as above:
Quotacy:
PolicyGenius:
Many quotes come out to about $20 per month for term life. That’s about $240 per year in premiums. As you can see, that’s far less expensive than the $6,297 and $7,083 annual premiums for a whole life insurance plan. (Those come out to $524.75 and $590.25 per month respectively.)
It just goes to show that many permanent plans, while more expensive, also have greater benefits, like paying premiums for only 20 years while having the lifelong coverage and access to increasingly growing cash value account even after you stop paying premiums.
If insurance companies perform well as expected and pay dividends as planned or better, the final death benefit can be massively more than the guaranteed death benefit of $300,000.
>>MORE: Differences between Whole Life and Term Life Insurance
