How to shop for life insurance
Want help navigating life insurance?
Life insurance is important for a number of reasons, but especially if there are people in your life who depend on you. Even if you don’t have dependents, there are many other compelling reasons to purchase life insurance.
And while it may seem like an overwhelming process, it’s not a good idea to put it off. Life insurance is less expensive when you’re young and healthy.
The following are a few things to keep in mind as you begin your search.
Determine what kind and how much
The first step for shopping for life insurance is understanding what type of life insurance you want to purchase. There are many online tools to help determine what type may best fit your needs.
When it comes to product selection, there are two categories of life insurance: term and permanent.
- Term life insurance, which is typically the simplest type of life insurance, pays only if death occurs during the length of time the policy is active (10, 15 and 20 years are the most typical).
- Permanent life insurance lasts your lifetime, paying a death benefit when you pass away.1
Next, you need to figure out how much coverage you need. It’s helpful to consider both the amount of debt (liabilities) you have and your salary. If you have a spouse or partner who depends on your income to pay for expenses, consider how many years of income you would like your life insurance to cover. There are tools that can help you figure out the right coverage to meet your needs.
What you should look for before buying
There are some key factors every buyer should be familiar with when shopping for life insurance, including:
- Medical exam requirements: In most cases, you will need to undergo a medical exam to qualify for the insurance coverage.
- Fixed or flexible premium: A life insurance policy with a fixed premium means the premium rate you pay will not change throughout the life of the policy, regardless of your age or health.2 A flexible premium policy, on the other hand, gives the policyholder the ability to customize how the policy is being funded, for example, how long the premiums will be paid.
Shop through a licensed professional or online
There are many benefits of buying life insurance through a licensed insurance professional. They can provide information on the different types of life insurance products. It’s good to have several options to choose from, but be aware that the number of choices may be daunting. This is where it pays to work with an insurance professional you trust, someone who can help you select which products may best fit your situation and needs.3
Insurance professionals can also provide you with quotes, help you apply for more complex life insurance products (such as whole and variable), keep you informed of where your application is in the underwriting process and answer any questions you may have.
If you don’t have an insurance professional, Nationwide has a team of life insurance specialists who can help, free of charge. They’re here to listen and learn about your unique insurance and financial needs. After discussing your goals and concerns, your specialist will provide customized education and guidance to help you protect your future.
You can also purchase life insurance online; however, you can typically purchase only term life this way due to the complexity of other types of life insurance. Start this process by getting a quote, which requires some basic information, such as your sex, age, weight and tobacco usage. Once you get your quote, you can complete and submit your term life application entirely online.
The information you may need to provide
Whether you’re shopping online or with an insurance professional, you’ll be asked to provide information about yourself, which allows the insurance company to assess their risk in insuring you.
This can include:
- Your age, height and weight
- Any risky lifestyle habits, such as smoking
- Your income
- Any life insurance you may already own
- Your medical history and/or records
- Your driver’s license number (to evaluate past driving behavior)
These questions must be answered honestly. Your policy can be cancelled for failing to provide the truth, especially when providing information about your health or lifestyle habits.
Getting life insurance is one task you’ll be glad you took the time to check off your to-do list.
[2] “How to Buy Life Insurance the Easy Way,” https://www.moneyunder30.com/how-to-buy-life-insurance-online (August 25, 2020).
[3] “Life Insurance with Fixed Premium Rates: What are my options?” https://cfainsure.com/life-insurance-fixed-premium-rates/ (Oct. 21, 2019).
Insurance terms, definitions and explanations are intended for informational purposes only and do not in any way replace or modify the definitions and information contained in individual insurance contracts, policies or declarations pages, which are controlling. Such terms and availability may vary by state, and exclusions may apply. Discounts may not be applied to all policy coverages.