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Life insurance is a great way to protect your loved ones' financial future should the unthinkable happen.
The good news is that buying life insurance just got easier thanks to online life insurance and faster approval processes. You can also buy life insurance through an agent or broker. Getting life insurance is not as complicated as you might think.
Learn how to get life insurance, how much life insurance you may need, what it entails and how to compare life insurance quotes. By doing your due diligence, you can likely save on premiums and ensure a safety net for your beneficiaries, giving you invaluable reassurance.
How to get life insurance
There are several ways to take out life insurance:
- Request life insurance quotes directly from a life insurer's website
- Get life insurance quotes from an online quote aggregator site that lets you compare rates from multiple insurers
- Contact a life insurance agent in your area
Going online is the easiest way to get life insurance quotes. You can do everything from the comfort of your own home. However, some people prefer to meet up with an agent in their area.
“Nothing beats a trusted insurance agent that you already have a relationship with. Ask what life insurance options are available to them,” suggests Jonathan Voegele, vice president of COUNTRY Financial's downtown office in Bloomington, Illinois.
When you start shopping for life insurance, you should also talk to trusted friends and family to learn which life insurance company will insure them.
"Getting a referral from a friend or family member for an agent or advisor they've used is often a great, safe way to get life insurance," says John Buenger, senior finance manager and advisor at Rice Agency in Hagerstown. , Maryland. . .
This does not mean that you should always agree with your friends or family's insurance company. Dig deeper and learn more about the company and your life insurance options and coverage levels before deciding on an insurance company.
Know the type of life insurance you need
There are two main types of life insurance: term life insurance and perpetual life insurance. Knowing which type is best for your needs is the first step in choosing insurance.
What they have in common is that they pay the beneficiaries a death benefit, usually in one lump sum.
Life insurance policies have a fixed period of years, e.g. B. 20 or 30 years. If you survive your policy, your dependents will not receive a death benefit on your death.
"Terms of life insurance only pay out if the death occurs during the life of the policy, which is typically one to 30 years," says Mark Friedlander, director of corporate communications at the Insurance Information Institute in St. Louis. Johns, Fla.
impostorterm insurance, You can choose between:
- level term: The death benefit remains the same throughout the period
- decreasing term: The death benefit normally falls in one-year increments over the life of your policy.
permanent life insurance
The other common type of life insurance ispermanent life. A perpetual life insurance policy pays a death benefit in the event of the death of the policyholder, provided periodic premium payments have been made. Unlike term life insurance, with a perpetual policy there is no time frame to worry about.
Four types of permanent life insurance are:
all traditional life
The death benefit and premium remain the same throughout the life of the policy.Whole life, and other types of permanent life insurance, supplymonetary value, which reserves part of the premiums paid and gives you access to life insurance for a lifetime.
universal lifeYou have a monetary value account that usually earns interest on the money market. Once you've accumulated enough money in your policy cash value, you can change your premium payments as long as you have enough money in your account to cover the costs.
Variable life insurance combines death protection with a savings account that can be invested in stocks, bonds, and money market funds. The policy value can increase faster depending on the investments, but this carries a higher risk. If your investments do not perform well, your death benefit and cash value may decrease. However, some policies guarantee that the death benefit will not fall below a minimum limit.
Variable universal life
universal variablesThe policies have the investment risk and return characteristics of variable life insurance. This is combined with the ability to adjust premiums and death benefits.
Decide how much coverage you need
To determine the coverage that is right for you, consider the financial needs of your beneficiaries when you die, including:
- future education costs
- credit card debt
- funeral expenses
Buenger says a good rule of thumb is to get life insurance that pays 10 times your annual income in death benefits.
"A claimant making $100,000 a year should probably be buying between $750,000 and $1 million in life insurance benefits per death," he says. "This death benefit must be large enough to cover 100% of your most recent expenses and funeral expenses, pay off debts including outstanding mortgage balances, car loans, credit card debt, and college/educational loans, and cover loss of income for a significant number of years."
Manny Lirio, marketing director for Vantis Life Insurance Company, based in Windsor, Connecticut, says it's also important to consider your investments and liquid assets, which can be converted to cash in three months.
"The difference between your total spend and the total amount can help ensure you're buying the right amount of coverage and not overinsuring," says Lirio.
leave oursLife Insurance Calculatorhelp you determine how much life insurance you need.
Get life insurance estimates
Whether you request a life insurance quote online, over the phone, or in person, rest assured that the process is relatively short. You will be asked a series of short questions related to your health, occupation, financial wealth and more.
After you have received a quote online or from an insurance agent, the next step is to fill out an appropriate form.
“The time commitment depends on the type of policy you choose. Simplified life insurance applications take about 30 minutes and can typically be completed over the phone or online,” said Jake Irving, owner of Willamette Life Insurance in Beaverton, Oregon. "Once approved, your policy will typically be issued within a few days and will come into effect when the insurer receives your first payment."
Premium costs depend on many factors, including age, health and gender. Unlike other types of insurance, life insurance does not take your zip code into account when setting premiums.
What documents are required for life insurance?
In order to fill out a life insurance application, a few things are required. Make sure you collect the following before applying:
- Name, address, telephone number and date of birth
- State/Country of Birth
- citizenship, gender and marital status
- Professional status, including details of your job responsibilities and salary
- net worth
- driver's license number
- social security number
- Medical history information and doctor contact information
- Credit card or bank information for payment (when ready to purchase)
“Be as honest as possible in the application process. Most insurance companies have ways of finding out your medical history. If your search does not match what you entered in the application, your contract can be rejected,” recommends Voegele.
How to compare life insurance quotes
Get at least a few quotes from different life insurers so you can do a full comparison.
To help you narrow down the right policy, company, and price, Friedlander recommends the following criteria:
- Products: Choose a company that offers the policies and features that suit your needs.
- corporate identity: Make sure you know the full name, place of incorporation and affiliation, if any, of each insurer you are considering.
- financial strength: “Life insurance is a long-term contract. There is no similar guarantee to life insurance policyholders as there is to bank accounts through the Federal Deposit Insurance Corporation. Therefore, select a company that is expected to be financially strong for many years by getting ratings from independent rating agencies such as A.M. Best, Fitch, Moody's and Standard & Poor's,” he says.
- market ethics: Find out if the company adheres to the Insurance Marketplace Standards Association policies and codes of conduct.
- advice and service: Try to choose a company with a helpful, responsive, and attentive customer service department.
- Expectations– Check a national claims database to see what claims information they have about a company. Visit the Better Business Bureau's review page for the insurance company. "Also, your state's insurance department can let you know if the company you're trying to do business with has received a lot of consumer complaints," adds Friedlander.
- Cost: Note that premiums can vary widely between companies.
How to take out life insurance online
Life insurers often offer you the option of purchasing coverage online. There are several reasons to take out insurance online.
“You can get instant approval and have your policy approved in less than 10 minutes as opposed to the old way of applying for approval which took four to six weeks. If you don't get approval right away, you're still in an expedited underwriting process, where approvals often take less than two weeks," said Shauna Visconti, director of sales and life insurance agent at Leap Life.
The internet also makes it easy to buy and compare policies. No need to meet with an insurance agent and compare different options.
"The internet is a crucial part of democratizing financial education," said Matt Myers of the Haven Life Insurance Agency, an online life insurance agency. “Increasingly, we all have access to the information and tools we need to educate ourselves, save more, invest wisely and buy the right products to protect our families and wealth. For people who prefer to do their own research and manage their finances, applying for and purchasing life insurance online is easy, transparent and incredibly convenient.”
How to take out life insurance online
The online process is easier. The applicant provides basic information such as:
- Personal and family health history.
The insurer then reviews the claim, often in real time, and returns an immediate decision on eligibility.
"If that's approved, you can start coverage that day," Myers said, adding that the person may need to undergo a medical exam to finalize pricing and coverage.
However, not everyone is eligible to purchase life insurance online. people withpreconditionsYou may not qualify for life insurance online. Instead, an insurance company will ask for more information about your health and order a medical exam.
Purchasing life insurance online is a quick way to get insurance. Answering a handful of questions can result in almost instant reporting.
Frequently Asked Questions
What is the best life insurer?
The best life insurance company for you is the one that offers a policy that meets your specific needs, not just the one that offers the lowest price. Whether you are looking for the cheapest or the most comprehensive life insurance policies, it pays to research different companies and research them carefully before making a decision.
To help you with your choice, seeInsure.com list of the best life insurance companies. The top three companies in the current ranking are AAA Life Insurance Company, American General (AIG) and Prudential.
Why should I take out my own life insurance?
Life insurance can support your long-term financial strategy and provide protection for your loved ones. In addition, life insurance provides income replacement if you die.
If you died, your family would not only be burdened with grief, but also with a mortgage, college tuition, credit card bills, and other credit. Your loved ones won't have you there to help them pay those bills. Therefore, you may need life insurance to give you peace of mind and take care of your beneficiaries.
Purchasing life insurance for yourself can provide a safety net for your loved ones should the unthinkable happen.
How can I get life insurance for my parents?
Anyone with an insurable interest can create and buy a policy for someone else, including your parents or grandparents.
However, Jake Irving of Willamette Life Insurance points out that the policyholder needs to be involved in the process.
"The proposed insured must consent to the policy, sign his name and be mentally and legally competent," it says. "To get the most accurate parent's policy quote possible, gather in advance the person's height and weight, medical history, list of prescriptions, desired coverage, phone number, address, date of birth, name of parent Beneficiary, Social Security Number, and Payment Information."
Erik J. Martin is a Chicago-area freelance writer whose articles have been published by AARP The Magazine, The Motley Fool, The Costco Connection, USAA, US Chamber of Commerce, Bankrate, The Chicago Tribune, and other publications. He often writes on topics related to insurance, real estate, personal finance, business, technology, health and entertainment. Erik also hosts a podcast and publishes several blogs including Martinspiration.com and Cineversegroup.com.
Table of contents
- How to get life insurance
- Know the type of life insurance you need
- Decide how much coverage you need
- Get life insurance estimates
- What documents are required for life insurance?
- How to compare life insurance quotes
- How to take out life insurance online
- Frequently Asked Questions
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