Having the right life insurance policy is one of the most important things you can do to take care of your family and loved ones in the case of your death. You need to make sure that you have the right coverage so they will not be left with financial hardships after you are gone.
If you do not have a life insurance policy or if you are considering getting a different life insurance policy, here are some tips on shopping for one.
- Before shopping decide what how much life insurance you want to purchase. If you have a family and your income is crucial to their financial stability, you will want to purchase enough life insurance that will keep them living in their current lifestyle.
Decide whether you want term or whole life insurance. Term life insurance premiums are generally less expensive initially because term life insurance is purchased for a specific term -- usually 5-30 years. It builds no cash value and if at the end of the term you are still living, you receive no benefits. It may be renewable at the end of the term, but generally at a higher premium than you initially paid. Whole life insurance is permanent. It is good for your entire life and builds cash value the longer you have it. The premium is fixed for life and as long as you keep up your payments; you never need to renew it.
You may also want to consider adding some specific riders to a standard insurance policy such as an accidental death rider or a waiver of premium rider.
- Once you have decided on the coverage you want, it is time to start shopping. You want to get premium quotes from several places to make sure that you are getting the best deal for the coverage you need. Quotes can be obtained by phoning the specific insurance agencies you are interested in or by using the Internet to search for quotes.
- If you choose to phone the agencies you are interested in, you can get their phone numbers from the yellow pages in the phone book, or use an online service like Switchboard.com to get their numbers. Ask to speak to an insurance agent.
Some agencies may ask you to come in for an appointment, but many will take your information over the phone. Once you've given the agent all your information, you will be given a quote for the insurance. It is best to call several different agencies before choosing the one to go with.
- If you choose to use the Internet to get a quote, there are many sites that can get several quotes for you by filling out only one questionnaire. Intelliquote and Insurance.com are two that will give you more than one agency's quote.
Once you've gotten several quotes, request to speak with an agent from the agencies that you think you may like to choose. You can ask them any questions that you have and request any specific riders to be added to your policy.
- Be honest with the insurance agency about your present physical condition, whether you are required to take a physical examination or not. If you are dishonest and a claim is made for the insurance, the insurance company may deny the claim.
Physical examinations are generally required for both term and whole life insurance. Some term insurance policies will offer the option of taking no physical. However, the premiums may be higher if you choose not to take a physical. The company is taking more of a risk not knowing your physical condition. It is unusual to find a whole life insurance plan that does not require a physical initially.
- Once you've chosen a policy, read it carefully. Make sure you are getting the amount of coverage that you requested and that there are no hidden surprises in your policy. If something doesn't look right, call the agency and ask about it.
- Once you are satisfied, pay your first premium and then you have life insurance. Continue to pay your premiums on time or your policy may be canceled.