What You Need to Know When Preparing to Buy Life Insurance
We want to make it as easy and painless as possible for you to think about and buy life insurance. A lot of people hesitate to make any decisions about life insurance because they’re scared of making the wrong choice.
With that in mind, we’ve prepared a checklist to help you think about and prepare to purchase the right life insurance policy for you.
1. Do I Need to Buy Life Insurance?
Naturally, the first question you should ask is, “Do I even need to buy life insurance?” Maybe you’re independently wealthy and you’re not worried about how your death will impact your family financially. Perhaps you’re retired so you don’t have an income that needs to be replaced.
The fact of the matter is, if anyone depends on you financially, life insurance is a must. Kids, a spouse, aging parents, or a business partner are all people who you may want to protect. Our Life Insurance Planning page looks at how the need for life insurance differs as you move through different stages in life.
Maybe you think the group policy you’re paying for through your employer is enough. That raises another question: are you going to work there until you die? Watch the video below.
We’ll be the first to admit, not everyone needs life insurance. But most of us do. And many wealthy people, who seem to need it the least, own the largest amounts of insurance.
Even if you don’t need life insurance, it may be extremely beneficial for you. Leaving a legacy, covering estate taxes, or just making sure your final expenses are paid for – a life insurance policy can help you accomplish any of these things.
2. How Much Do I Need?
Lack of certainty on this point can be a major barrier to getting the protection you need. And there’s pressure to pick the right amount. After all, there are no “do-overs” after you make a claim (although periodic policy check-ups can help you make sure your coverage continues being aligned with your needs). Many people who want to get life insurance are intimidated by the large number of available options.
We’re here to make this as simple as possible for you. Our How much do I need? page walks you through the factors you need to take into consideration to decide how much life insurance is the right amount for you. There’s even a calculator to help you do the math!
3. How Long Do I Need to be Covered?
Do you only need to be covered for a certain period of time? Or do you want life insurance guaranteed to last until you die, no matter when that happens?
Term life insurance protects your family for 10, 20, 25 or 30 years. Many are comfortable with their policies expiring when their children are adults or when their mortgage is paid off. If that’s the case, term life insurance might be what you’re looking for.
Term is simple and inexpensive, so it is an attractive product, especially for young, healthy individuals.
Permanent life insurance is lifelong protection. It’s impossible to outlive your coverage and you’ll almost always get more out in benefit than you pay in over the years, assuming you continue to pay the premiums. If you have permanent needs, or if you’d like to pass a lump sum of tax-free cash to your loved ones, permanent life insurance may be your answer.
4. Shop Around!
Life insurance is like most other products: there are a ton of available options. Each has different features and different prices. Shopping around is the best way to know you’re getting the right product at the best price.
Here at AccuQuote, we do the shopping for you, saving you a whole lot of time and effort. We’ll evaluate your specific needs and show you the best values from top-rated insurance companies in the country.
5. What You Need to Know for the Application
You will need to complete a life insurance application. You’ll have to tell your agent some personal information. Make sure you can provide accurate responses about your:
- lifestyle habits such as tobacco use, risky hobbies, etc.
- income and
- any life insurance you already own
It’s absolutely essential that you are completely honest about these responses. It’s important to tell the truth. If the insurance company finds out that you gave misleading information about your health or habits, they may cancel your policy. If they find out after your death, they may refuse to pay the death benefit to your beneficiary.
The video below talks about a a sure-fire way to screw up your life insurance application.
6. Getting Ready for Your Medical Exam
In most cases, you’ll have to take a medical exam after submitting your application. In the following video, you’ll learn some helpful tips that will help you prepare for the exam. Preparing properly will help you make sure you get the best rate class you can qualify for.
(Check out our No Medical Exam Insurance page if you want to purchase life insurance but you’d rather skip the medical exam.)
7. The Underwriting Process
After you submit your application to us, we send it to the insurance company and they begin a process known as underwriting. Underwriting is a fact-finding mission where the insurer determines how much your premiums will be. They might ask your doctor for additional medical records, look at your driving history, what you do for a living, and other more in-depth factors that affect your rate.
This process usually takes about 3 to 8 weeks but it can happen more quickly, or it can take longer. Life Insurance is not a one-size-fits-all product, and every policy has to be carefully reviewed.
If there’s anything we can do to help, feel free to call us at 800-442-9899 and speak with one of our advisors. You can also get a free quote in about a minute: just click the “Get Started” button below.