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How To Shop For Life Insurance

Sarah Sharkey4-minute read
February 03, 2022

If you are working to clean up your personal finances, finding the right life insurance policy is a critical step. No matter what condition your finances are in, you want to provide for your loved ones financially in the unexpected event of your death. 

Although it can be uncomfortable to think about your own death, it is important to consider the possibility. If you do experience an untimely death, your family will already be reeling from that loss. You don’t want to leave them in a position where they need to worry about the finances at that time. Instead, you want to have a life insurance policy in place that will alleviate any financial stress in the short-term. 

If you’re ready to seek out a life insurance policy that will provide for your family, keep reading.

Determine Your Needs

Before you start shopping for a life insurance policy, determine your needs. Otherwise, you will not be able to make an informed decision while shopping. 

First, think about the long-term financial needs of your spouse and children. Think about any current financial obligations such as your mortgage or credit card debt. Also, consider long-term plans such as a funded retirement or college tuition. 

Next, think about your assets. In the event of your death, your family might use your assets to fund any financial needs. Once you understand what qualifies as an asset, consider that value in your life insurance calculations. Many life insurance professionals recommend a policy with a value of 5 – 10 times your income. 

Finally, consider the benefits of both whole and term life insurance before you start shopping. 

  • Term life insurance. Most experts prefer term life insurance to whole life insurance. As the name suggests, you’ll have coverage for a fixed amount of time. These policies are generally more affordable because there is no cash value component. The policy will only provide an agreed-upon death benefit if you do pass away within the term limits. 
  • Whole life insurance. Whole life insurance policies cover your life without an expiration date until your death. These policies are more expensive than term life policies because they include a cash value component in addition to a death benefit. 

Take a closer look at both types of life insurance to decide which is best for you.

Where Can I Purchase Life Insurance

There are several ways to purchase life insurance. Take the route that seems most comfortable for you. 

Shop Online

One of the easiest ways to shop for life insurance is online. You can use a site like PolicyGenuis to find quotes from multiple companies at once. This will allow you to see a range of policy options in a short amount of time. 

Make sure to work with a reputable site. If the site asks for your Social Security number, try another site. A legitimate company doesn’t need sensitive information to provide quotes. 

Talk To An Agent

If you aren’t sure what you’re looking for, talking to an agent could be helpful. However, some agents will only sell policies from particular companies. If you choose to work with an agent, find one who works independently and can show you quotes from a wide variety of companies. 

Work Directly With A Company

In some cases, you might be able to save on your insurance premiums by bundling with your home or auto insurance. Look into the policies that your current insurance company has to offer. If you find a policy that suits your needs, then you can choose to work directly with the company. 

Purchasing A Life Insurance Policy

Let’s take a closer look at some of the steps you’ll need to take in order to buy a life insurance policy. 

Life Insurance Quotes

As you walk through the process of purchasing a life insurance policy, you’ll need to provide information about yourself. Make sure to be honest so that your quote is an accurate reflection of your policy. 

Some of the general information might include your age, weight and gender. You’ll also be asked to share some of your lifestyle choices, such as whether or not you smoke, and personal medical information. 

You may also be required to complete a physical evaluation with a doctor before the policy can take effect. With that, your quote might change based on the findings of your medical exam. 

Compare Life Insurance Quotes

It’s not enough to get a single quote. Shop around. As you start to compare the quotes, you might be shocked by the extremely wide range in price. 

While the price is an important factor, you need to look into the specifics of these quotes. Find the differences in the policies to determine which one is best for your situation. A few things to look out for include:

  • Fixed or variable premiums 
  • A guaranteed renewal process
  • A medical exam requirement 
  • Start date of the policy
  • Any cancellation policy 
  • Automatic payment options 

Find a quote that suits your life and your budget. 

What To Look For In Term Life Insurance

In most cases, term life insurance will be a solid option to provide for your family. Term life insurance covers a certain amount of years that you agree to when you enroll. For example, let’s say you sign up for a 25-year policy. If you pass away in that window, your loved ones will receive a payout. However, if you survive the term, then you’ll walk away from the policy without a payout. 

In general, term policies are more affordable than whole life insurance. This allows you to provide for your family if you should pass away. But the lower cost will allow you to work on other financial goals such as saving for retirement or paying off your debt.

Term life insurance offers the best of both worlds: peace of mind without compromising your other financial goals. Make sure that any term life policy that you consider will cover any financial obligations your family might face if you pass away before the term expires. 

The Bottom Line

Finding a life insurance policy doesn’t need to be a stressful process. Although it will likely be unsettling to think about the possibility of your death, you’ll feel better knowing that your family is taken care of. Don’t wait to find the right life insurance policy for your family’s needs.

Sarah Sharkey

Sarah Sharkey is a personal finance writer that enjoys helping readers learn more about their finances. She has an MS in Business Management from the University of Florida. You can connect with her on LinkedIn or Instagram @adventurousadulting.