Finding the right life insurance policy can seem daunting, but it doesn’t have to be! As a finance blogger, I want to walk you through the key steps I took to find the best life insurance for my needs. With some smart shopping, a little research, and a few tips along the way, you can also find a policy that provides the coverage you want at a price you can afford.
Understand The Different Types of Life Insurance
There are two main categories of life insurance:
Term Life Insurance
- Provides coverage for a set period of time, usually 10, 20 or 30 years.
- Term life insurance quotes are generally cheaper than permanent insurance.
- Great for covering needs you may have for a limited time, like providing for young kids.
Permanent Life Insurance
- Provides lifetime coverage as long as you pay the premiums.
- More expensive but builds cash value you can borrow against.
- Types include whole life, universal life and variable life insurance.
I decided term life insurance made the most sense for me since I was looking for affordable coverage to provide for my family while my kids are young. As they get older and more independent, my need for a large death benefit decreases.
Determine How Much Coverage You Need
When getting life insurance quotes, one of the first questions is “How much coverage do you need?” Here are some things that impacted the amount I needed:
- Income replacement:Â I wanted enough coverage to provide for my family for about 10 years if something happened to me. This included ongoing expenses, college savings goals, and paying off debts like our mortgage.
- Final expenses:Â The cost of a funeral, burial plot and headstone added another $15,000 to my needed coverage.
- Debts:Â I wanted to make sure my family wouldn’t be left having to pay debts like credit cards, car loans or our mortgage if I passed away.
Take the time to think through your unique situation. An insurance agent can also help you determine the right amount of coverage.
Get Life Insurance Quotes From Multiple Providers
Here comes the fun part – shopping for the best rate! When comparing life insurance quotes:
- Get quotes from at least 3 to 5 different life insurance companies. Rates can vary a lot between insurers.
- Compare policies with similar coverage amounts and terms. This ensures you are comparing “apples to apples.”
- Consider getting a quote from your auto/home insurance company. They may offer multi-policy discounts.
- Look for a company with a solid financial strength rating from an independent agency like A.M. Best. This helps ensure they can pay out claims in the future.
- Pay attention to any extra fees, like charges for late payments. Little things can add up.
Taking the time to shop around saved me nearly $30 per month compared to just going with the first quote I received!
Compare Term Life vs Whole Life Insurance
In addition to getting quotes from different insurance carriers, I also compared term life insurance quotes to permanent whole life insurance quotes.
While whole life policies were more expensive, they did seem appealing since they lasted for life and built cash value. However, I ultimately decided:
- The much lower cost of term life insurance provided better value for my needs at this stage of life.
- I can invest and grow money more cost effectively on my own than with the cash value of whole life insurance.
- I may re-evaluate my need for permanent life insurance later on for estate planning purposes.
This comparison helped confirm that term life insurance was the right pick for me today.
Consider Getting a Health Exam for Better Rates
Most life insurance quotes only require you to answer some health history questions. However, you may be able to get an even lower rate by actually taking a medical exam.
During the exam, they will check things like:
- Height and weight
- Blood pressure
- Cholesterol levels
- Heart health
Insurance companies use this information to gauge your overall health. The better results you have, the better rates they can likely offer.
I decided to get an exam, and it ended up saving me about $15 per month! Just a quick checkup that was worth it.
Understand The Policy Details
Before officially enrolling in a policy, be sure to read over the fine print so you know exactly what you are getting. Key things to review:
- The coverage amount and length of the term. Make sure it matches what you applied for.
- When payments are due and how much they will be. Set up autopay if possible.
- How beneficiaries are designated and any payout options. Update as needed.
- What events or reasons could cause the policy to be cancelled. Know what voids coverage.
Taking the time to understand these details prevents any unhappy surprises down the road. You worked hard to find the right coverage, so make sure the policy delivers what you expect!
Pick a Company and Policy You Trust
At the end of the day, your life insurance policy needs to be with a reputable company that stands behind their promises. I looked for a carrier that:
- Has strong financial ratings so I know they’ll be there when needed.
- Has been in business for decades and paid out claims reliably. Check reviews online.
- Has good customer service that can answer questions and handle policy changes.
- Offers online account access to easily manage my policy.
While the process took some time upfront, I now have life insurance coverage I can rely on. I know my family will be protected financially no matter what happens. With a little effort, you can find a policy that gives you that same peace of mind.
If you have any other questions as you shop for life insurance, feel free to reach out! I’m happy to share more about my experience and offer tips to help you secure the best policy. Good luck