Life Insurance - It is Not an Impulse Purchase
Buying life insurance isn’t a purchase that happens overnight. Even before you complete an application, you should take time to find the right policy and carrier to apply with. This is not a ‘one size fits all’ type of product. Just because your friend bought a $250k term life insurance policy, doesn’t mean that will be the right policy for you. Each of us is different – and our insurance needs differ also.
Do your research before applying. Start by having an insurance needs analysis done, or complete our simple needs calculator on Pivot.com. This isn’t an exact science, and is easily a step that can be over-complicated. The goal here is to factor in all the important assets that you want covered by the life insurance policy – college tuition for the kids, mortgage, lost income and other outstanding debts are good places to start.
Next, you will want to find a carrier. Again, we all have different needs, so this process can be easy for some and difficult for others. If you are healthy, it will likely just come down to cost. If you have a medical condition that may affect your insurability, then you will want to do more research at this step. Carriers view certain conditions differently. For example one carrier may rate a person with diabetes at a higher rate class (i.e.; more expensive), while another carrier may rate that same person at a lower rate class (i.e.; less expensive). In these scenarios, it is sometimes best to give us a call at 1-800-651-1953 to fully review your specific situation to find the best carrier.
Lastly, keep in mind, this is a long term purchase so selecting a carrier that will be around as long as the policy is active is very important. Make sure you are going to be applying with a carrier that has strong financial ratings. This is an indication of how financially strong the company is – you want the company to be around and able to pay claims when you need them.
Now you are ready to apply! Completing the application is easy and generally takes 15-20 minutes. Once the carrier has the application, it will be reviewed by an underwriter. This is another time where we each differ a little bit. Underwriters review each application individually. Depending on the applicant and their own personal situation, the underwriting process can take anywhere from a few days to a few weeks. To do their job, underwriters sometimes need to collect data on your medical history, driving records and if applying for large death benefits, typically financial records. Acquiring all this information takes time and thus the reason for some of the longer underwriting times.
About the author: Seth Gowdy is the Sales Manager for Pivot Insurance and holds multiple insurance and securities licenses. He has been part of the financial services industry for nearly 20 years. In his free time he enjoys being outdoors fishing, hiking, and geocaching with his wife and two children. Seth most enjoys helping clients with Pivot’s anonymous life insurance quote process and needs calculators. You can reach Seth at 1-800-651-1953 or SGowdy@pivot.com.