Do You Know How To Find the Best Life Insurance Policy in ?
If you were driving down the highway trying to find a specific destination. You will have two main goals you will want to accomplish. This will look at your destination as quickly and as efficiently as possible. You will not want to spend more time driving than you have to. This is also similar when shopping for the best life insurance policy.
Also, you surely don’t want to encounter any unnecessary stress or aggravation along the way. This concept is the same when searching for the best life insurance companies and policy designs. Reading this blog post will give you valuable insight into applying the best life insurance policy and getting the lowest rates simultaneously.
Table of Contents
- Should I Work With an Independent Insurance Agent?
- Why Do I need Life Insurance?
- How Much Coverage Do I Need?
- What Type of Life Insurance Should I Buy?
- No Medical Exam vs. Fully Underwritten Policies
- Best Life Insurance Policies for Special Purposes
- What Types of Beneficial Riders Should I Consider?
- How Can I Reduce My Premiums?
- Can I Apply for Life Insurance Over the Telephone?
- In Conclusion
Should I Work With an Independent Insurance Agent?
Purchasing the best life insurance policy will require help from an experienced independent agent. There is far too much involved in trying to do this by yourself. Why would you even want to when there is no cost to have an agent help you? A captive agent like State Farm sells only one company. Captive agents limit your ability to shop the market, which is virtually the same as driving with handcuffs.
This will never work when looking for the very best life insurance rates. Instead, an independent agent uses all the top-rated life insurance companies available. This way, you are always assured of getting the lowest premiums. Getting the best life insurance policy is easy when you have an expert helping you.
Why Do I Need Life Insurance?
If your income suddenly stops from your untimely passing. Who is going to suffer from this terrible event? Of course, you will probably say it will be your spouse and children. The bank that holds your mortgage will also suffer, but they will pass the burden onto your family instead.
This holds for your car payments, credit cards, and anything else you have a financial obligation with. When the smoke clears, your dependents will be responsible for your debts. Finance companies are never very forgiving when it comes to unpaid loans. When you look at the complete picture, you will see a huge financial mess. Your dependents will be caught right in the middle.
This will usually change your dependent’s lifestyle forever. Unfortunately, many people roll along without life insurance and let their dependents walk that financial tightrope. They commonly use the concept, “why should I worry about it? I will be dead”. I hear people say this regularly.
How Much Coverage Do I Need?
- Determining face amounts: Most life insurance experts recommend purchasing enough life insurance to replace approximately seven to ten years of your income. The most critical factor is whether you can afford to buy this much life insurance without breaking the bank. This will depend on how old you are when you buy your life insurance. Also, if you have any medical conditions that can increase your rates.
- Special Care Dependents: You have any dependents that need special care due to medical issues, either physical or mental. You should allow for more coverage to compensate for their additional needs.
- Large Families: If you have a large family with more than four children, you should compensate for this with additional coverage with numbers such as $100,000 per child.
- Employer Coverage: Quite a few people have life insurance through their employer. You cannot count on life insurance because nobody has guaranteed job security. Suppose you do have life insurance through work. Just make sure you are adequately covered in your policy. If you are terminated, your employer’s life insurance could go up in a puff of smoke. This could also happen if you are laid off or your employer has a benefit cut-back which is very common.
- Excessive debt: Some people have excessive obligations above and beyond average financial liabilities. This can stem from a home that is above their safe financial means. Also, a larger-than-normal car payment can cause additional financial worries. The average person often will not consider this when he buys life insurance. Having that new Mercedes-Benz in the driveway is excellent if you can comfortably afford to pay for it.
What Type of Life Insurance Should I Buy?
Term Life Insurance:
There are two main types of life insurance to consider. These are low-cost term life insurance products and permanent life insurance. Affordable term life insurance will be your best bet, with the lowest rates. However, keep in mind that a term is a temporary form of life insurance.
These plan designs have term periods of 10, 15, 20, 25, and 30 years. Banner Life insurance company recently developed a 35 and 40-year product. This is excellent news for many younger people. This increase in the term period can help you find the best life insurance policy.
Remember that term life insurance must be purchased with the correct term. If you are buying too short a term, you could find yourself without coverage when you still need it. It happens to many people each year to not plan correctly. You can also include universal life into your life insurance package for lifelong coverage benefits. Term life insurance can also be converted to universal life at a specified time in the policy.
Universal Life Insurance:
People will often need life insurance for over 30 years, usually the term life insurance limit. There are two types of permanent life insurance products, Universal Life and Whole Life. The Whole Life is no longer practical due to the high cost.
Also, many companies have dropped it from their product line. However, universal life insurance products are the best way to go if you are looking for life insurance that will last for the rest of your life.
No Medical Exam vs. Fully Underwritten Policies
For the most part, no medical exam life insurance means no medical exam is required. In other words, this means no para-med nurses are coming over for a visit. You still have to complete a medical questionnaire to apply and be approved. If any major health concerns are listed on your application, the no medical exam part will stop dead in its tracks.
You would then have to complete a paramed exam to allow the insurance company to examine how much risk they are taking. If you are in good health, no medical exam policies are acceptable, but they will always cost more in the long run. The most common versions of these policies are guaranteed issue and simplified issues.
However, fully underwritten policies are conventional types of life insurance that offer the lowest premiums as a rule. These policies require a medical exam performed by a nurse in your home or place of employment. They offer the lowest rates because life insurance companies can learn more about your lifestyle and health history.
Life insurance companies can offer you the best insurance policy at the lowest possible rates. Most people choose the full underwritten policy designs to receive the lowest premiums.
Other Insurance Products to Consider
- Simplified issue life insurance: The simplified issue product line can be built on a universal or whole life chassis. This policy usually waives the medical exam but requires a detailed medical questionnaire. The average limit for face amounts will be $250,000, but some companies will increase it to as high as $350,000. These policies will cost more than fully medically underwritten policies.
- Variable universal life: A variable universal life policy allows you to decide precisely how you want your cash value to be invested. You can make this decision independently or have professional financial help. However, just like investing in stock, you can lose some or all of your cash value with the variable version.
Some People Need More or Less Coverage Than Others
- High Incomes: People with higher incomes and who live within their means are a perfect example. Today, most Americans live above their financial means and go from paycheck to paycheck. As a result, upper-income people tend to use more caution when spending money. They also tend to be more careful when using credit.
- Single people: Single or married couples with no children usually do not need as much life insurance. This is primarily true if both spouses work and have steady incomes.
- No mortgage: If your home is paid off or you have a minimal mortgage. This can significantly impact the size of the face amount you need.
- Significant Savings: Consumers with considerable savings can go with a lower face amount.
- Family heirs: Some people will be natural heirs to their parent’s estate, creating less need for life insurance. If individual parents own property such as a home or business, this can make all the difference. Parents may also have life insurance to pay a considerable face amount. All these factors will enable the son or daughter to purchase much lower death benefits than others.
Best Life Insurance Policies for Special Purposes
- Divorce settlements: People going through a divorce can be ordered by the domestic relations judge to purchase life insurance. They are applying for life insurance for a divorce settlement, just like typically purchasing life insurance. The only exception may be that the court will quickly order you to produce a life insurance policy. This is where no medical exam life insurance can be beneficial. Non-exam policies can have a brief turnaround period of as soon as 24 hours. The main reasons life insurance is requested are for children and their financial future.
- Commercial investments: Many times, people buying a business or commercial real estate will be required to purchase life insurance. This could also be for partnerships with a first-to-die clause or critical employee life insurance.
- Mortgage insurance: Periodically, people who take out a loan to purchase a home will be asked to produce mortgage insurance. This will pay off the mortgage if the homeowner dies within the mortgage term.
- Buy/Sell agreements: When an individual purchases a business, a buy/sell agreement is written that would also require life insurance. This is more of a specialized policy but is used regularly for commercial purposes.
- Estate taxes: When people in higher-income classes pass, their dependents must pay an estate tax. This is where life insurance can be used to pay off estate taxes, so they are left with the entire inheritance.
Beneficial Riders to Consider
Riders can be beneficial in most cases but usually come as an added expense. Let’s look at some more common riders to see if they would benefit you.
- The return of premium riders will enable you to receive all the premiums paid if you outlive the policy terms. For example, if you bought a 20-year term policy. You spent a total of $18,500 over the 20-year term period. The 20 years have come and gone, and you are still alive. You will receive a check from the insurance company for the total amount you paid. These return of premium policies have higher premiums, so life insurance companies can afford to do this.
- Accidental death benefit riders can increase your death benefit if you are killed as the outcome of an accident. Some companies offer these riders an even higher increase if you are killed on a common carrier. This would include trains, airplanes, and ships.
- Waiver of premium riders can keep your coverage in force if you become disabled and cannot afford to pay your premiums.
- Accelerated death benefit riders can trigger your coverage under certain cases early if you are diagnosed with a terminal condition.
How Can I Reduce My Premiums?
1. Always Take the Medical Exam!
Do not choose the non-medical exam life insurance route because you don’t like to take physical exams. The exam you will receive from an insurance company para-med nurse will only take about 15 minutes. This can save you thousands of dollars while you’re paying premiums every year. I wouldn’t say I like to take exams, but I will take one if there are financial savings.
2. Don’t Procrastinate!
The longer you wait, the higher the quoting rates go up. Buy your life insurance as soon as possible and lock in your rates. People are famous for procrastinating life insurance, which can only cost you money every month or year you wait. The older you get, the higher the cost of a new life insurance policy. On top of that, the longer you wait, the chance of new medical conditions coming into the picture increases. If the proper medical condition comes along, you could easily find yourself uninsurable.
3. Purchase Low-Cost Term Life Insurance
Your best bet will be affordable term life insurance 95% of the time unless you need coverage for the rest of your life. If you need permanent insurance, you can purchase universal life, which will be much more cost effective than whole life insurance. You can also combine term and universal life for a tremendous money-saving life insurance package.
4. Don’t Waste Your Time With Multiple Agents
All life insurance rates are regulated by law in every state of the US. If there is one concept you need to understand, insurance brokers and agents cannot discount rates. Your state’s Department of Insurance regulates life insurance prices if an agent shows you rates from Prudential or American General, for example.
Every other insurance agent in the nation will show these same rates with no exceptions. Even purchasing directly from the company will result in the same rates. So if you find an agent or broker you like, stick with him; otherwise, you will be wasting your valuable time and getting confused. Many people go from website to website, looking at life insurance quote engines and looking at the same rates every time.
Can I Apply for the Best Life Insurance Policy Over the Phone?
Modern telephone applications are all we recommend now. Paper and online applications are obsolete if you want to save time and apply in the most efficient way possible. If you remember, the paper application contained about 25 pages in the past, and having a case of writer’s cramp was a sure thing when you were done.
The online application was much better, but many people would get confused about completing them if they did not have sufficient computer experience. You will also have a fast internet connection to perform the online application properly.
The telephone applications will allow you to sit back and listen to a very friendly young lady ask you questions, and you answer them. Nothing could ever be more accessible when applying for life insurance.
I hope this information will make you a more intelligent consumer in your quest to buy the best life insurance policy. A good agent can make the whole process easy, and we have been helping people find the best life insurance products for over 30 years. We will be happy to answer any of your questions about life insurance and how to apply the best life insurance policy for your needs and budget seven days a week.
All the best,
When using a good agent, finding the best life insurance policy is very simple. If you have any questions, contact us today, and we will help you at no cost or obligation. We are brokers and do not work for insurance companies. We only have your interest in mind by helping you get the best policy at the lowest possible rates. You can also set up a specific time to get all your questions answered.