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Life insurance isn’t one-plan-fits-all, but we can help you compare coverage and rates from some of the most trusted life insurance companies in just minutes.
Seven Tips for Buying Life Insurance
Buying life insurance is an important step to protecting your loved ones’ financial future. With so many options and different types of life insurance coverage available, SelectQuote is here to help you through the process. We want you to feel confident that your life insurance policy is right for your needs and your budget. Whether you’re a first-time life insurance buyer or reshopping your policy, keep these seven tips for buying coverage in mind.
1. Understand Why You Need Life Insurance
Life insurance is a valuable means of protection for anyone who depends on your income or financial support. If you were to pass away unexpectedly, your life insurance policy would help ensure your loved ones could still afford day-to-day expenses as well as long-term financial obligations like paying off a mortgage, paying down debt, putting children through school, or saving for retirement. Having life insurance coverage not only provides financial security but also invaluable peace of mind for those who matter most.
2. Know the Different Types of Life Insurance Coverage
Life insurance policies typically fall into two categories: term life insurance and permanent life insurance. Term life insurance policies are designed to last for a predetermined period of time—usually 10, 15, 20, 25, or 30 years. The term length that’s right for you will depend on both your current circumstances and future financial goals. Term policies are a popular type of life insurance due to their flexibility and affordability.
On the other hand, permanent life insurance policies are intended to last your entire lifetime. While typically more expensive than term policies, permanent policies are a great option for people who want the long-term peace of mind of coverage that doesn’t expire. Permanent policies also come with a cash value component that grows over time and can be used as an investment or savings tool.
3. Determine Your Desired Life Insurance Coverage Amount
It’s important to not only think about what type of life insurance is right for you but also about the coverage amount and length of coverage you’ll need. The answer will vary depending on your current situation and stage of life. For example, people going through significant life changes, such as newlyweds, new homeowners, or new parents, often choose policies with longer terms, such as a 30-year term, while families approaching milestones like retirement may choose a shorter term. The right amount of coverage will depend on your income and how much money would be required to continue to support your family’s current expenses. It’s typically recommended to have coverage that’s 10-15 times your annual salary, but our life insurance calculator can help you get started on figuring out how much life insurance is right for you.
4. Be Prepared to Answer Questions on the Life Insurance Application
During the life insurance application process, carriers will evaluate your risk level by asking questions about your family background, medical history, and lifestyle. They’ll use this information to determine your premiums, so it’s important to answer these questions honestly. This includes sharing information about hospitalizations, medications, procedures, surgeries, and more. They’ll also ask about your occupation and any hobbies you participate in, as working a high-risk job or having a dangerous hobby can impact your premiums.
5. Be Honest During the Life Insurance Application Process
It’s important to provide accurate and complete information about your medical history, lifestyle, occupation, and other topics during the life insurance application process. If you misrepresent any information on your application, it’s considered life insurance fraud, and the insurer may consider you a moral risk and reject your application. This will not only leave you without coverage from that specific carrier, but could also impact your eligibility for coverage with other carriers. The consequences of falsely representing yourself on a life insurance application could even result in legal repercussions, so it’s vital to ensure the information you provide is current and truthful.
6. Shop Around and Compare Life Insurance Rates
It may seem like the easiest option to go with a life insurance carrier that’s already familiar to you, but it’s important to shop around to ensure you’re not missing out on better coverage or more affordable rates. Life insurance rates and coverage vary widely by company, so exploring plans with different carriers is the best way to understand all the options available to you.
Shopping around can seem time-consuming and overwhelming, but we’ll help make it easy. We’ll take the time to learn about your unique needs and situation to provide you with multiple quotes from some of the most trusted life insurance companies.
7. Get a Free Quote with SelectQuote Today
Shopping for life insurance doesn’t have to be complicated. Whether you’re looking for a new term or permanent policy, updating your existing coverage, or simply want to learn more about the value of life insurance, we can help. Our experienced licensed insurance agents can help you find the right coverage for your needs and budget, all in just minutes.
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While there are a variety of factors to consider before buying life insurance, we’re here to make the process easy. Keeping your specific priorities in mind, we’ll shop trusted insurance companies on your behalf, using our proprietary technology to quickly and easily gather different plan details and quotes.
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