Life insurance is critical to ensuring the financial security of your loved ones. But, many people put off buying life insurance because it’s not the easiest or most interesting of things to buy. If you’re unsure of how to go about buying life insurance, here’s a simple guide to help you out.
How to Buy Life Insurance
There are three ways to buy life insurance:
– By directly getting in touch with an insurance company
– Via an independent local agent
– Through an independent online broker
While you can also purchase life insurance from an agent who works for a single insurance provider, we don’t recommend this approach because they will likely try to sell you policies offered by the company they are affiliated with. There’s nothing wrong with this, but you miss out on being able to compare your options and choose a plan with the most competitive price and coverage.
What Kind of Life Insurance Plan Should You Get?
Most policy buyers opt for term insurance plans because they’re priced well and have pretty straightforward payouts. Term insurance works by providing your beneficiary a payout if something untimely happens to you. However, if you survive till the completion of the policy term, no payout is offered by the insurance company.
Term insurance plans typically offer coverage for a certain number of years – 5 to 30 years. So, if you require lifetime coverage, you may have to opt for a permanent life insurance plan. These plans offer coverage for as long as you live and also build a cash value, which you can borrow against. Due to this, permanent life insurance plans are more expensive in comparison to term insurance plans.
How to Apply for Life Insurance
If you want to buy a life insurance policy, the first thing you should do is request insurance companies for their quotes online or by visiting their office. Compare the cost and coverage of different plans and get the one that best suits your requirements. Once you shortlist a certain policy, you can apply for it. The process will likely entail the insurance company asking you some personal questions, submission of paperwork, and possibly a medical exam.
Once this is done, the insurance company will verify your application and documents and approve your policy.