When you shop for 10 pay life insurance, you may only be concerned with the price. If this describes you, you’re looking for term life. You want the right about of insurance at a fair price with a company you can trust. Sometimes, getting started is the hardest part. That’s where the following Life Insurance Checklist can help.
1. What will your policy do for you?
Ask yourself what it is you want your life insurance to do. For example, do you want to have insurance coverage that will:
Pay for your burial costs?
Pay off any outstanding medical bills and other debts?
Cover your income when you’re gone?
Provide some money to your children for education?
A combination of all or part of the above?
Knowing what you want with your life insurance policy and approximately how much you need to achieve these goals will help you determine how much life insurance you should consider purchasing. Online calcs can help you figure up how much insurance you need.
2. Who would you like to protect?
Most insurance companies have many different products to suit your lifestyle and family needs. You can purchase insurance on yourself or you and your spouse (called a joint life insurance policy). The most common joint life policy provides coverage when the first partner dies, leaving the life insurance benefit to the surviving spouse.
3. How long do you need the policy?
Consulting a psychic isn’t necessary, although it does require that you estimate the timing of your life insurance needs. For example:
When will your mortgage be paid off? The amortization period of your mortgage will often determine how long your term life insurance policy should be.
When will your children be finished school? One day they’ll finish their education and having enough life insurance coverage to pay their educational expenses won’t be necessary. When are you planning to retire? After you retire, your kids are gone and you probably have paid off your debt.
Knowing how long you need coverage helps you pick the right policy. Online tools are available to help you figure out which term for your life insurance policy is most recommended for people with similar lifestyles.
When you figure out what you need, who and how long questions answered, you’re ready to shop.
1. Compare life insurance quotes from multiple companies:
Get several quotes because life insurance rates can deviate substantially depending on the product you choose, your age, and the amount of coverage you request. It’s not really that difficult, because with the Internet you can compare life insurance quotes easily, online, anytime.
2. Which policy has been quoted standard or preferred?
There are two basic groups you should know about when shopping for life insurance coverage: standard rates and preferred. Standard life insurance rates are the rates the majority of Americans qualify for.
Preferred life insurance rates are typically offered to very healthy people and means you may pay a smaller premium than most. Usually preferred rates are offered only once the results of the medical information and tests are known. It will depend on your blood pressure, cholesterol levels, height, weight, and family health history. But preferred rates are worth it. They could save you up to 30-35% off your quoted premium.
Make sure you are making fair comparisons, don’t compare standard rates from one company to preferred rates of another. If you’re not sure, ask the broker. You could end up cheating yourself later on.
3. Review the life insurance broker’s availability:
Is the broker easy to contact? Will they have time for you if problems arise? Whether it is through their website or telephone, the life insurance broker should be easily accessible to you should you ever have questions or need to speak to them about a change in your life insurance needs. Look for 800 type numbers.
4. Review the medical information required to obtain a life insurance plan:
The more the insurance company knows about you, the better the price. If the company isn’t asking you a lot of questions, you can bet the premium is higher for the same coverage then a plan asking for more information. Depending on the company, your age, and the amount of coverage you want, you could be asked to provide blood and urine samples. To obtain the samples, a nurse will visit at not cost to you.
5. Consider a life insurer’s financial stability and strength:
You want to consider a company’s comdex score. There are organizations out there, like A.M. Best, that evaluate insurers and provide a rating on their stability and strength.
6. Ask about renewal options and requirements:
Once the initial premium is set, it is usually guaranteed for the length of the policy (often 10 or 20 years). But what happens when the policy expires? Most insurance policies can be renewed up to age 75 so don’t forget to ask your broker if you will have to take a medical to renew your policy. At this point your premiums will increase, find out if they will also be guaranteed to remain level for the second term of the policy.
7. Confirm the policy can be canceled without penalty:
Make sure you can cancel without a penalty if you need to. Make sure to check with your broker to see if the life insurance company has any unusual cancellation policies.
Final tip choose a life insurance broker you trust:
This has nothing to do with the quality of the company or the product, but a rapport with your broker is critical in feeling comfortable with the life insurance policy you buy and the information you’ve received.
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