Did you just get married or have a new child? If so, that means it’s time to buy life insurance! Or, if you’ve already got life insurance, a new family member means it’s time to review your coverage and determine whether you need to buy more. We’ll help you Buy Life Insurance the Easy Way.
Life insurance is considered as a critical component of financial security that nobody wants to handle. Why? Because it’s so confusing, boring, and depressing. But as soon as somebody relies on you for financial support, you should consider having a life insurance.
Life insurance is far less expensive when you’re young and healthy. So why the wait!
How to Buy Life Insurance
There are three basic ways to buy life insurance:
- Directly from an insurance company
- Through an independent local insurance agent
- From an independent online broker.
It is very important to let you know that you should always buy life insurance from an independent broker. Agents who work for a single insurance carrier, will be eager to sell you a policy making life insurance pricing incredibly complicated. If you don’t shop around for best prices, it is quite possible that you will pay in excess than you are supposed.
If you are working with a trustworthy independent insurance agent, they may be your first choice with who you discuss life insurance with, and of course there’s no big deal in that. But your agent may offer you with different types of life insurance and the choices may be to your advantage.
Once you find out what kind of life insurance you want to buy, comparing policies will be a little bit easier although there are still a number of variables.
What kind of life insurance to buy
Term life insurance is the only advisable kind you should consider.
Term life insurance is relatively cheaper and for 99 percent of people, term life is the best financial decision when buying life insurance. The insurance industry earns big profits and their agents take big commissions from products known as whole life insurance, universal life insurance or cash-value life insurance.
Although for most people, anything other than term life insurance is not too good an idea.
Term life insurance is very easy to understand due to the fact that it works just like your car or homeowner’s insurance. It allows you to pay your term life premium every year you’re covered. If there is death within the covered period, the policy pays a death benefit and when the policy expires or you stop paying your premium, the coverage ends.
How to apply for a life insurance policy
After you’ve found your best quote, you’ll need to apply for the life insurance policy—this process can take several weeks. The process of applying for life insurance can involve even more extremely personal questions, paperwork, and a medical exam. Here’s what happens next:
Verify your application
First, you’ll need to speak with an agent on the phone who will verify some of the information you provided online and confirm that the quote you selected is the best policy for you. The agent will then provide some paperwork for you to sign and submit your application to the insurer.
Schedule your medical exam
If the insurance company requires a medical exam, a contractor known as a paramedical professional will contact you to schedule the exam. The paramedical professional is trained like a nurse in performing a physical exam.
Life insurance medical exams sound like a pain, but the reality is they try to make them as easy as possible for you. They’ll come to your workplace during the day or your home very early in the morning.
Complete your exam, then wait!
The examiner will take a thorough medical history to confirm the info in your application. He or she will take your blood pressure and draw a blood sample that will be sent to a lab to test for cholesterol and glucose levels, tobacco and drug use, and diseases. These results will be shared with you by mail.
In life insurance applications, honesty is paramount: don’t be surprised if you must answer the same question about your medical history or tobacco use five times, but always answer honestly. Insurance companies share information, so misrepresenting information might not just get you denied from one carrier, but banned from many. Worse, it could give the insurer legal grounds to deny your family’s claim if you die.
The insurance underwriter’s job is to take all the information from your application and medical exam and decide whether to insure you and how much to charge. This takes many weeks. You’ll want to ask your agent whether the carrier binds any life insurance upon receipt of the application. For example, when you submit your application and a check for your first premium, many carriers will insure you for something, although not the full amount you’re requesting, pending completion of the underwriting process.
What to expect after you apply
When your policy is approved, it is placed in force and you will be notified, and receive a full copy of the policy. However, if you didn’t already provide your agent with a deposit, you’ll be asked to make the first premium payment.
Some insurers may allow you to make your first payment to bind your policy upon submission of your application. The insurer reserves the right to cancel the policy or increase your premium if your exam reveals previously undisclosed medical conditions.
The agent will send you a hard copy of the policy. It is advisable that you make a copy of this policy, place the original and the copy in different spots for safety reasons, and let your spouse know about their location.
Finally, you can sit back and relax knowing fully well that a solid financial plan is in place for you and your family.
That’s it! Although it seems like the process of buying life insurance is long, but I assure you that it can be easier than you think. Scheduling the medical exam and waiting on the results are the only thing that may cause delay.