Life Insurance Buying Guide

 Step 1: Determine How Much You Need

Think about what expenses would need to be covered in the event of your death. Consider things like mortgage, college tuition, and other debts, not to mention funeral expenses. Plus, income replacement is a major factor if your spouse or loved ones need cash flow and are not able to provide it on their own.



There are helpful tools online to calculate the lump sum that can satisfy any potential expenses that would need to be covered.


Step 2: Prepare Your Application

Life insurance applications generally require personal and family medical history and beneficiary information. You may need to take a medical exam and will need to disclose any preexisting medical conditions, history of moving violations, DUIs, and any dangerous hobbies, such as auto racing or skydiving. The following are crucial elements of most life insurance applications:

Age: This is the most important factor because life expectancy is the biggest determinant of risk for the insurance company.

Gender: Because women statistically live longer, they generally pay lower rates than males of the same age.

Smoking: A person who smokes is at risk for many health issues that could shorten life and increase risk-based premiums.

Health: Medical exams for most policies include screening for health conditions like heart disease, diabetes, and cancer and related medical metrics that can indicate risk.

Lifestyle: Dangerous lifestyles can make premiums much more expensive.

Family medical history: If you have evidence of major disease in your immediate family, your risk of developing certain conditions is much higher.

Driving record: A history of moving violations or drunk driving can dramatically increase the cost of insurance premiums.

Standard forms of identification will also be needed before a policy can be written, such as your Social Security card, driver's license, or U.S. passport.

Step 3: Compare Policy Quotes

When you've assembled all of your necessary information, you can gather multiple life insurance quotes from different providers based on your research. Prices can differ markedly from company to company, so it's important to make the effort to find the best combination of policy, company rating, and premium cost. Because life insurance premiums are something you will likely pay monthly for decades, finding the best policy to fit your needs can save an enormous amount of money..

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