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Getting life insurance quotes online is not as difficult as some might think. With a little bit of familiarity and some credible online sources, you can easily find the best life insurance product to provide for your family and to give you peace of mind.
Getting online life insurance quotes starts with education. After you know what types of products are available to you and the insurers that offer these products, you can start your shopping spree by comparing rates.
Here is your step-by-step guide to getting life insurance online without ever leaving your home or skipping lunch to visit an agent.
Always use a comparison tool before making any policy decisions. Our FREE quote tool above will help you get started today!
Step 1: Deciding Which Type of Insurance You Need
Before you can start pricing products, you must know what type of product is designed to meet your family’s financial and personal needs.
There are two categories of life insurance: term insurance and permanent insurance.
Within these categories are several different types of plans that have their own unique features designed to meet the needs of a specific demographic or niche. Life insurance certainly is not one-size-fits-all and the variance in the individual plans available to consumers shows this.
Here are the questions you will need to ask yourself to select a plan:
Why am I buying life insurance?Everyone buys life insurance for financial protection but not the same type of protection. Some consumers want to protect their families by providing them with replacement income or a lump sum of cash to pay off debts.
Other consumers want want to pay for their own final expenses when the time comes to arrange a funeral.
Individuals who have savings to cover their income or to pay for burial may want to purchase insurance to pay for estate taxes so that the taxes do not take away from their family’s inheritance.
You need to ask yourself what your insurance needs are and what your financial plans are for the future.
What are the differences between each plan?
After assessing your insurance needs, you will then need to decide which plan will fit into your budget while helping you accomplish what you have set out to do by buying insurance. Term and permanent insurance plans are very different.
They each have their advantages and disadvantages. Even more so are there differences between different types of term insurance and permanent insurance. Here are the key features of each plan:
Term Life Insurance
Term life is a temporary life insurance product that provides the named insured with protection for his or her beneficiaries for a specific time period. Generally, term insurance offers protection for 5, 10, 20, or 30 years, but some specialized plans offer annual protection.
This type of pure life insurance is less complicated than the alternative because you have straight life protection that you receive in exchange for a premium. If you pass away during the term, your beneficiary is paid.
If you do not, the policy ends and you may be able to renew depending on your personal factors. Here are the types of term insurance available:
- Level Terms: Level terms offer level death benefits for the entire life of the policy. The term can last anywhere from 5 to 30 years, and you must medically qualify by passing a paramedical exam before a policy will be issued. Many level terms also have a guaranteed premiums rider. This rider states that your premiums will stay level for as long as the policy stays in effect.
- Annual Renewable Terms: These terms are less popular now that insurers have pushed level terms, but they are good for some niches. The biggest difference between annual terms and level terms is that you do not have to pass an exam or medical check to get coverage. Instead, you may have to answer basic health questions. The premiums will stay level for only a year because you are a greater risk. The policy itself can be renewed for a set period of years, but you must pay higher premiums each one of these years.
- Decreasing Terms: Financial obligations do not always stay level, and this is why the decreasing term was created. This term offers you with pure life protection and level premiums based on your age at the time of the application. The major difference is that the death benefit will shrink as your debts do. You should review the time intervals, but usually every 5 years the benefit and premium will go down.
Permanent Life Insurance
Permanent life insurance lasts for your entire life. There are no terms or expiration dates. In order to offer this type of protection, the insurer will use the premium dollars and place them in an investment account.
You will earn interest on a portion of the investment, and this is why permanent insurance is called cash value insurance.
It offers you a death benefit, but will also offer a living benefit if you face difficult times or you want to save for future expenses you can foresee. The two popular types of permanent insurance are whole life and universal life:
- Whole Life Plans: Whole life, also called traditional permanent insurance, was the first cash value plan available to the public. With this type of plan, the cost to insure you is projected for your entire life at the age of application. The premiums you are quotes will go towards the insurance cost, management fees, and the cash account where it will earn interest. The premiums stay level for your entire life because money from the cash account is used to fund rising premiums as you age. You do have the option to borrow money, but must pay it back to keep the death benefit level.
- Universal Life Plans: Universal life, also called adjustable life, is a more flexible type of permanent plan that will allow you to adjust your premiums based on what you can afford to pay. The main difference is the way that universal life is funded. You can choose pay less in the beginning, or stop and reduce payments later in life. You just need to be sure that the policy stays funded to stay active.
How much insurance do I need?Now that you have found the plan that helps you accomplish your need, you can then decide how much insurance is ideal.
You can use a life insurance needs calculator that will address every expense to allot for.
Do not forget about the future costs that can come in the upcoming stages of your life.
Step 2: Qualifying Insurers Before You Consider Pricing
Not all insurers are created equal, and finding the reputable insurance companies who will cover claims in a timely manner is imperative.
This is why you should always qualify the insurer before you let an affordable price trick you into choosing a less than reputable company.
Remember that low pricing is important, but it could be a red flag to indicate the company is not financially secure as well.
Here are some factors to research on your own:
Departments of insurance are in every state, and they are present to protect consumers by setting a code of conduct. Be sure the company you choose has an active license in your state so that you have a entity to go to if you ever need to report problems.
Financial stability and creditworthiness is important. If a company is not stable and secure, they cannot stay in business.
Be sure to check the financial rankings of each insurer on your list before you trust them to provide you with financial protection.
If a company has a history or a reputation of upsetting their clients, this is something you should know.
There are official complaint databases where you can search for active and close cases. If you see trends in claims issues or misrepresentations, you should take your business elsewhere.
Step 3: Compare Pricing
After you have sifted through the companies, it is time to compare pricing. Every company sets their own rates and finding the company with the rates that are best in your niche is possible when you comparison shop.
The easiest way to comparison shop is to use an online rating system that connects you to the rates with all of the top insurers. These systems make it so that you can instantly compare price without having to speak with multiple agents.
As you compare pricing, be sure to review the terms of each policy to look for differences.
Once you find a competitively priced plan with quality terms from a reputable insurer, you can start the application process by filling out your application and submitting it to underwriting.
You may be asked to electronically sign papers. If everything you stated is correct, your policy will be issued.
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