When you take on the task of shopping for term life insurance, it comes down to finding a company you can trust and selecting the correct amount of insurance coverage you need – at a reasonable price.
That’s where our Life Insurance Tips Checklist comes in handy.
What do you need your policy to achieve for your and your family?
Ask yourself what it is you want your life insurance to do. For example, do you want to have insurance coverage that will:
• Should it pay for funeral arrangements?
• Do you need it to pay an outstanding balance on a mortgage or other debts?
• Will you need your policy to offset the loss of your income to your family? For how long?
• Are you hoping your policy will contribute to your children’s educational expenses?
• Do you need any or all of the above?
The crucial element is to understand what you want to accomplish with your purchase of life insurance. Exactly how much coverage you need to achieve your goals is the cornerstone in helping you determine how much life insurance to purchase.
Who would you like to insure under the life insurance policy?
Many insurance companies offer a variety of life insurance products, and lots of them are sure to suit your lifestyle and the needs of your family. You can purchase an insurance policy on your own life, or you can insure both you and your spouse via a joint life insurance policy. The most common joint life policies provide coverage which kicks in when the first partner dies, and that leaves the life insurance benefit to the surviving spouse.
How long will you need your life insurance?
You’ll need to estimate the full duration of your life insurance needs, and to do that, you should consider:
• When will your mortgage be paid down? The “amortization period” of your mortgage is an excellent indicator of how long your term life insurance policy be in force.
• How long will it take for your children to finish their schooling? Times passes quickly, and one day, your babies will finish their education. Providing them enough life insurance coverage to pay their educational expenses is critical.
• Any idea when you plan to retire? You’ll have less income to replace once you’re retired…
If you know how long you’ll require life insurance coverage – before you begin shopping – you’ll help yourself understand how comfortable you’ll be with the life insurance product you end up selecting. Again, our online tools are there to help you figure out what level of coverage we recommend for people with lifestyles similar to yours.
You’ve got the “how much” and “how long” questions covered, now you’re ready to shop…
It’s time to compare life insurance quotes from multiple companies. It pays to shop, and our life insurance quote tool lets you review quotes from 50 top insurance companies – anonymously. Keep in mind that life insurance rates can vary considerably depending on your choice of products, your age and the total amount of coverage you specify.
Have you been quoted rates for “standard” or “preferred” coverage?
Two basic life insurance rate groups are: standard rates and preferred. Standard life insurance rates apply to the majority of policies, but some one-third of the population is also eligible for preferred rates. Preferred rates are typically offered to very healthy people and that means you might pay a lesser premium. Preferred rates are offered only in the event medical information and test results are known to your insurer. The rates depend on results from tests meant to determine your blood pressure, cholesterol levels, height, weight and family health history. It might sound like an inconvenience, but preferred rates might well save you up to 30-35% off your quoted premium payments.
As you compare quotes and prices, take note as to whether you’re comparing ‘standard to standard’ or ‘preferred to preferred’ life insurance rates.
Review the medical information requirements you’ll need to meet to obtain your policy…
Here’s the rule of thumb: the more medical information you provide, the better the price for your policy. Policies which require few or no medical questions are likely to set you back more in premium payments than those which offer the same coverage but ask for more information. Depending on your age, the amount of coverage you want, the company you’re researching and whether or not you’re asked to provide blood and urine samples, the price can vary wildly.
Understand the details of your policy as they relate to renewal options and requirements…
Once an initial premium price is set, that price is generally guaranteed for the length of the policy – often 10 or 20 years. It’s key that you know what happens when the policy expires. Most policies are renewable through the age of 70 or 75, but not all, so don’t forget to ask your broker or read the fine print to find out if you will have to take a medical exam to renew your policy down the road. Premiums can be higher on renewal. Find out where you stand – and if they’ll be guaranteed to remain constant – for a second term of your policy.
Know whether or not your policy can be canceled without penalty…
Most term life insurance policies can be canceled, at any time without penalty, but make sure to check your policy details to determine if the life insurance company has any unusual cancellation standards.