Buying Term Life Insurance Online
Life insurance is one of the best ways to protect your financial security. Life is full of unexpected events and financial planning can literally make or break a family. Shopping for term life insurance is a fairly easy process and we are here to help you navigate the process.
There are 4 basic steps to follow:
Step 1 – Figure out how much coverage you need
What do you want to cover in the event of your death; loss of income, large debts, children’s college tuition? These are some of the first questions you need to ask yourself before you do anything else. There are dollar amounts tied to each answer and this is how you determine the amount of coverage you need. Thankfully, there are life insurance calculators available – like the ones available in our Tools Section – that can help you quickly calculate your coverage needs.
Step 2 – Time to Shop!
Now that you know how much coverage you need, it’s time to find out the cost. For each individual this process will be different even if the coverage amounts are the same. What you are looking to do is get a ballpark cost of how much that coverage will cost for your situation (i.e.; age, gender, health, etc.). Honesty is key in this step. This isn’t the time to lie about your age or your current health – you are trying to get a good feel for what this will really cost if you were to apply and approved for coverage. Make sure to check out carrier ‘build charts’ and other guides to verify how your current height/weight and other health conditions will factor into your final rating. This will really help get you a quote that will likely be closer to the actual cost after underwriting approval.
Step 3 – Making the Selection
After shopping - which is really just running quotes for yourself - you next need to narrow down those results. There are many things to consider when making your decision. Price of course, is close to the top of everyone’s list – rightfully so. This helps knock out the vast majority of options. After that you want to make sure the company you are applying with is financially strong. You can verify this a few ways, but one of the most common is to verify their current Ratings (i.e.; A.M.Best, S&P, Moody’s, Fitch). This will help verify a carrier’s expected current and future claims paying ability. Another item to consider before selecting a carrier to apply with is your own health situation. Carriers usually vary in how they underwrite certain medical conditions. If you think you have a condition that may affect your approval for life insurance, make sure to mention it before applying as it may be more beneficial to apply with another carrier. Lastly, consider if you need any of the offered riders. Not all carriers offer the same types of riders so make sure the one you are selecting offers the rider you wish to have.
Step 4 – Apply
You are now ready to apply for the best life insurance policy that fits your needs – wasn’t it worth the effort to get to this point? To those of you who have not applied for life insurance before, this process can seem long at times. It’s typical to expect the application and underwriting process to take 20 days or more. Most of the time is spent acquiring your medical records and other information the underwriter needs to make an informed decision. At the end, the underwriter will advise of the rate class (if approved), or provide a reason coverage was not offered (if declined). A formal contract will be sent to you, and lastly you will be asked for signoff acknowledging receipt.
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.