How to buy Life Insurance?
Buying life insurance is like buying a car. If you know the different models, options, trim level, and price, you can pretty much buy a car online. If you don’t, then you usually find yourself at a car dealership, working with a car salesman to get the right car for you.
Similarly, you can either contact a life insurance agent or directly work with a life insurance company. If you are knowledgeable about life insurance, go straight to the life insurance company. If not, and you decide to go the agent route, a good life insurance agent will help you navigate all of the life insurance options and variations available. You should be careful in selecting and working with an agent since they will have a lot of influence on you. Take control of this process; misrepresentation is the #1 complaint of life insurance consumers. Life insurance agents can belong to several reputable independent life insurance agent certifications and affiliations, which indicates that they are well trained. Examples include Chartered Life Underwriter (CLU), Fellow of Life Management Institute (FLMI), and Chartered Financial Consultant (ChFC). Agents are also required to follow a set of guidelines, issued by the state where they are licensed.
Once you settle on a life insurance agent and / or life insurance company, and type of life insurance, the process to purchase a life insurance policy starts with an application. The application contains a series of questions; your answers will be used by the life insurance company to decide whether they will insure you, what terms they will offer, and what premiums they will charge. The primary factors that life insurance companies consider are age and overall health, particularly if you are or were a smoker. Make sure you fill out the application as accurately as you can. Any discrepancy or failure to disclose may lead to the insurance company refusing to pay out the benefit when you die.
Following the application, life insurance companies usually require a physical exam, likely not with your personal physician. Once the life insurance company has all of this information, they will give you quotes for the various policy options. You pick one, sign the contract, make the payment, and you are all set.