Do you need life insurance? Ever wonder what it’s like to go through the process of researching and selecting a life insurance policy? I highly recommend you get life insurance, but I don’t necessarily wish the buying process upon you. It can be tough to navigate.
That’s why today I’m going to share the steps you need to complete while searching for and buying life insurance. I’ll share my experience with buying my own term policy as well. This includes getting the life insurance quote (from someone like insureme.com), selecting the insurance company, taking medical exams, filling out applications, and a lot of waiting. Hopefully this quick guide will give you the confidence to take the steps to protect your family.
Step 1: Research the Type and Amount of Life Insurance to Buy
The last thing you want to do is go into the buying process without doing your own research. You need to understand the particular type of life insurance product to buy. And you’ll need to decide how much coverage to sign up for. I’m not going to go into those decisions here because I’ve explained them in prior life insurance related posts. But I will tell you that making those decisions is easy once you understand the different options.
And unless you have a particularly rare family situation, you don’t need an insurance salesman to tell you what type or how much to get. While I’m sure there are some very helpful, honest insurance salesmen, you don’t really need them with the wealth of free information available to you on the subject, and the online services / company portals that can help you find the best price.
This process took me only a few days, but I took some time before requesting quotes. I ended up deciding that I needed a $500k 20-year term life insurance policy.
Step 2: Request a Life Insurance Quote Online
Once you know what you need to buy, you can begin to shop around. As with any major purchase it’s good to shop around and try and find the best deal you can. Here are some options for where to shop:
Use a Life Insurance Broker – Insurance brokers are usually paid by the insurance companies to bring you in, so there’s no extra cost applied to you. A broker is going to have access to different insurance companies’ policies and rates. Therefore, they can help you find the best price. A great broker to start with is Insureme.com.
Straight to the Insurance Company – If you already have auto or home insurance with the likes of an Allstate or State Farm, you should see what they can offer in the way of life insurance and a combined policy discount.
Consider Your Employer – If you work for a big company, odds are they already have you set up with a life insurance policy with a minimal amount of coverage. They also will usually offer more coverage at reasonable prices. You definitely need to compare these prices to see if it makes sense to just buy more from them.People with current health issues should especially consider this insurance because your company is likely not going to require a health exam or deny you because of previous health issues. Keep in mind that you need to make sure that the policy can be converted to your own term life insurance policy in the event you leave the company.
I requested quotes with Zander insurance (the Dave Ramsey endorsed insurance broker), Allstate (my home’s insurer), and ING (ingforlife.com), who just recently started offering insurance through newly acquired ReliaStar. I also checked out my employer options. The quoting process took only a day.
Step 3: Pick a Highly Rated Life Insurance Company
After you get your quote information, don’t rely on price alone to make the decision. Swing by insure.com and check the rating for the company who will be insuring you. I feel safe saying that you wouldn’t want to go with an insurer with a rating less than A. You might also consider doing some general searching online for any issues / complaints with the particular insurer.
I ended up picking ING (ReliaStar). They had the best price, good service, and a good enough rating. Plus, I already have a comfortable relationship with ING’s online banking product.
Step 4: Get a Life Insurance Health Exam
Once you decide on a company, they’ll want you to complete a health exam. They will cover this expense, but you’ll need to schedule some time with the medical company that they use to complete the exam. The exam usually involves a questionnaire, blood samples, height and weight measurements, and a request for medical records. It’s typically done at a time convenient for you, at your home, and is really quick.
I dreaded the exam portion of this process, but it ended up not being that bad. The examiner was very professional and it was over with quickly. It took about 2 weeks from the quote to get the exam performed.
Step 5: Turn in Your Life Insurance Application
The application is usually given to the exam company, who then passes it, along with exam results, to the insurance company’s underwriter, who decides on your insurance class. You may be given the option to pay for your policy at the exam and lock in your insurance. I opted not to do this and to wait to see the final price.
Step 6: Wait for the Insurance Underwriter
An underwriter is the person working for the insurance company who decides if they can insure you and how much it will cost to do it. They factor in as much information as they can about you. The biggest factors are obviously age and health. There’s usually at least a 2 week wait from the time the exam is complete till the underwriter makes the determination.
Step 7: Pay Your Life Insurance Premium
Finally, when the underwriter is done, you’ll be sent your policy and information to make your payment. Once payment is received, you’re insured.
So that’s what you can expect when trying to get life insurance. It’s not an easy process. But I do feel strongly that it’s worth the hassle. I’m happy with the coverage I now have and I rest a bit easier knowing that my family has a bit of protection in the event something happens to me.
Have you purchased life insurance? Was your process similar? If you haven’t purchases it, what’s holding you back?
Photo by Corey Leopold
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I went through these same steps 3 years ago and went with ING reliastar as well. Wow!
This is good information. Thanks
Good to know, Ken. Thanks.
Between term and whole life insurance, the sensible choice is term life insurance and investing the difference. This list will help people who are in the process of getting life insurance. Wish you had put it up a few years back, when I was shopping for my own policy
Being young, single, healthy, I figure I have no need for it now since I am only responsible for myself, but should look into it more for when the time comes.
@Craig – Yeah, I see no reason for the single man to get it. Enjoy it while ya can!
I love the image. Looks like Marfa. Good advice on the life insurance…it’s always good to know that if something ever happens to me my family is set up.
I have 30-year term life insurance (250k) which my two children are the beneficiaries 50/50. It is with USAA.
I checked the rating on USAA and it’s got a triple A rating…..extremely strong. I take comfort in this knowing that if something happens to me, they will receive the proceeds in full.
I just saw this over on the Black Coffee. I like how you outlined buying life insurance like it’s not scary.. because it shouldn’t be. I also like how you went to a few different sources to compare life insurance quotes because no single agent knows all the answers for you. Of course, if you were able to compare multiple agents in one place, that would be nice too;)