For many, the phrase “buying life insurance” conjures up images of a well dressed salesman coming to the house to sell a complicated financial product.
In many cases, this is still how life insurance is sold and bought, but technology has developed to allow those that prefer an online shopping experience to be able to buy a life insurance policy full online.
Prepare your information to provide to the insurance companies
In order to get accurate quotes from the insurance companies, you will need to be ready to provide them with as much information as possible.
The main factor in determining your life insurance premiums are your age and your current health condition; therefore you should make sure to have all your most current medical exams ready as the insurance company will likely need this before selling you the policy.
They likely won’t need all this to provide you with the initial quote, but they will need it for the final contract.
Understand the different kinds of coverage available
Many people do not realize that there are actually many kinds of life insurance policies on the market.
Some of the main differences are between a whole life insurance policy and a term life insurance policy.
As the name suggests, a whole life insurance policy covers the policy holder for the entirety of his or her life, while a term life insurance policy does not, usually having an age where should the policy holder decease following that age, there will be no benefits paid out.
There are other nuances out there in the market as well, as some policies have some auxiliary benefits and some that even pay benefits while the policy holder is living, though this is very rare nowadays.
Interestingly enough, this is still very common in Japan, and citizens there view Life Insurance as an investment in the same way they can view a stock or bond portfolio, thanks to these in life benefits that are consistently paid out every month.
These benefits used to be much more common in the US market in the past, but insurance companies have largely removed them as they ended up turning many policies unprofitable for the insurance companies, and they did not see a way to be able to continually and sustainably offer these policies.
All this goes to say that you should really read the fine print of the life insurance policy you do decide to buy, as you need to make sure you fully understand the coverage you are getting, and not be swayed only by a low sticker insurance premium.
Compare multiple quotes from insurance carriers
There are various online tools you can utilize to be able to compare quotes from different insurers.
Some of these tools operate in a consolidated format, in which you fill out one form, submit your information and will then be contacted by competing providers.
The benefits of this option are that you can get many carriers competing for your business, each competing with each other and bidding over themselves, getting you a competitive price.
The drawbacks are that depending on which marketplace you use, your phone may be ringing non-stop for weeks from agents trying to sell you a policy, even after you’ve already purchased one.
We recommend using a reputable marketplace such as PolicyGenius in this case in order to avoid problems with the way your information is handled.
The second type of option is more akin to a traditional yellow pages type of listing in which you get a list of insurance carriers that service your area, you click over to each of their pages, and then you submit your information and receive individual quotes from each of the carriers.
The benefits here are that you have more control over where your data goes, and there is generally more transparency throughout the process as to why you are being quoted the numbers you are.
The drawbacks are obviously that it takes more time, and you may not be able to reach as many companies with this method.
The nature of this method is such that for companies to get in front of you they need to have large advertising budgets, meaning that you likely won’t see very life insurance company available.
If you decide to use this type of click marketplace, we recommend the tool over at TheSimpleDollar as an easy one to use.
Adopt healthy habits
As we mentioned previously, one of the main factors in determining your life insurance premiums is the current status of your health.
There are many health conditions which are unexpected, due to genetics or unforeseen circumstances, and many times you have no control over these conditions.
There are some things; however, which you can do that improve your overall health. If you are currently very overweight, insurance companies may see this as a risk factor and may quote you higher premiums.
To the extent possible, attempt to incorporate exercise and healthy eating habits into your life, as some companies will offer outright discounts for evidence of these types of practices in your life.
Life insurance as a product has evolved over decades, and frankly many very attractive benefits that used to be standard in most policies in the past are no longer available in the market today.
It stands to reason that policies should be cheaper today, and in many cases that is true but you do have to shop around online to ensure that you are indeed getting the best possbile rate for your current situation.
In any case, the best advice for purchasing life insurance is to purchase a policy while you are still young and do not yet need it, as the price will go up exponentially as you age.