Life insurance can be an important life line if you or a family member pass away. There are different policies to choose from, however, and it’s important that you choose the right one for your family’s financial and individual situation.
In this article, we’ll take a look at the best ways to shop for life insurance and discuss the differences between policy types so that you can make the best decision and choose the plan that fits your needs. Keep in mind that your health condition and your age have a lot to do with what’s available to you and the price you’ll pay for your insurance.
Different Insurance Policies Available
Before you begin your shopping, it’s essential to know the basic differences between life insurance policies so that you can choose the one that’s right for you. Here are the main options you’ll have to choose from:
- Term Life Insurance – With this type it will work to cover more immediate needs within 5-30 years, like paying off mortgages if a spouse dies or for children to supplement income if parents die. It will expire and payout once you’ve reached the term.
- Whole Life Insurance – With this type of insurance you’ll have coverage for the entirety of your life and have the potential of leaving an inheritance to your beneficiaries. This policy will not expire.
- Universal Life Insurance – This type of insurance plan allows you to make more choices in how your plan is paid into. For instance, if you want your premium to primarily fund your death benefits or if you want to pay more into the cash value of your plan. With a universal plan, it will expire once you reach a certain age and then you’ll obtain a payout.
- Final Expense Life Insurance – This option is more short-term and is best for those who have no debt and have no need to leave an inheritance. Final expense insurance is cheaper and will allow for funeral expenses to be covered.
- Group Life Insurance – Group life insurance is typically offered through employers. Companies will sometimes secure low-cost insurance plans to their employees that have lower premiums due to the group rate.
- Accidental Death and Dismemberment Insurance – This is usually an extra protection option that you can add to a whole or term life insurance policy. This protection will allow for coverage if you or a family member dies in an accident. The dismemberment portion is payable even if you or your family member doesn’t die, but if you’ve experienced a loss of a limb due to an accident.
- Simplified Issue Life Insurance – If you have pre-existing medical conditions you may want to consider this type of insurance plan. You will not need to undergo any health exams for this type of policy.
Whichever plan you choose, remember that it’s important to review it every few years to ensure it still works with your financial and family situation and needs. Life changes and your insurance policy will often need to change with it.
Where to Shop
Now that you’re aware of the main types of insurance policies and have considered what type might be best for you and your situation, you’ll need to decide how you’d like to shop for and purchase your plan. There are a number of ways accessible to you:
- Online – There are a number of sites to utilize that will allow you to compare rates and plans and obtain quotes. You’ll need to be careful on the information you provide (don’t readily give out your social security number, for instance) but this can be an easy way to shop and compare on your own time. One website you may consider using is Esurance.Com.
- Buying Direct – If you choose to go directly through the insurance company, this is fine, but you’ll want to make sure to check out the company’s reliability first. Reading reviews from other customers can be helpful, as well as verifying the financial strength of the company. You can check into the current and previous financial health of a company utilizing Standard and Poor’s world-recognized research, data, and statistics.
- Insurance Agents – Working with an insurance agent can be great because you can gain insight and knowledge into options available to you from someone with experience in the area. You do need to be careful, however, at how you choose the agent you work with. Many agents work directly with certain insurances, and for this reason, they will not present you with all the options available to you. If you choose to work with an agent, try to choose one that is independent so that you can get a variety of quotes on policies from different companies. Be sure to check references of your agent and that they carry appropriate and required state licenses before you use them.