It has been reported that in 2018 only 60% of Americans have a life insurance policy. That means that 40% of U.S. citizens have no financial security in the form of life insurance should they pass away unexpectedly.
Life insurance is something that people of all ages should consider purchasing. However, shopping for a life insurance can be a time-consuming task that takes a lot of research.
After all, how do you go about comparing quotes, learning about the different coverage options and figuring out which life insurance provider is best?
One of the best ways to shop for life insurance is to buy life insurance online. But before you do, there are a few things you need to know about shopping for life insurance the smart way.
Read this guide to online life insurance before making a purchase that greatly impacts the well-being of you and your family.
What is Life Insurance?
Contrary to what some insurance companies would have you believe, life insurance is not an investment. Although it can be a part of your overall financial and retirement planning it should not be the main vehicle.
Instead, think of life insurance as exactly what it is: insurance that protects the people who financially depend on you should you pass away. It’s a vehicle for providing the people that you name as beneficiaries a financial safety net in the case you can no longer provide for them.
The right life insurance policy can help your loved ones cover outstanding debt and make mortgage payments. With proper life insurance planning, it can help replace lost income or provide funding for your children’s college education. For almost everyone, it assists with overwhelming burial and funeral expenses.
Outside of life insurance for families, life insurance can play a very large role in many business planning needs. For example, life insurance can be used to set up a buy-sell agreement between business partners, used to insure a key-employee and many cases be used to secure a small business loan from a lender.
How does Life Insurance Work?
Life insurance is a contract between both the policyholder and the insurance company. In order for the contract to work, the policyholder is required to make predetermined premium payments to the life insurance company.
In return, the life insurance makes a promise to the policyholder that they will payout a predetermined death benefit to the insured’s beneficiaries should the insured pass away while the life insurance coverage is activ
How are Life Insurance Rates Calculated?
There are several factors that come into play when determining life insurance rates and they all revolve around underwriting. The most common underwriting factors will be your age, gender, tobacco use, height and weight and most importantly your overall health history.
When applying for a life insurance policy, you’ll be asked a number of questions. These give the insurance company information about your current and past health conditions. It also informs them of any family health concerns that you may be genetically susceptible to.
Most of these questions are obtained through a medical exam provided by the insurance company or through the actual life insurance application if you are applying for coverage that doesn’t require an exam.
If your life insurance coverage requires a medical exams it will often consist of medical questions, blood test, urinalysis, blood pressure readings and a check of your height and weight.
With all this information, a life insurance company will calculate your life expectancy and provide you with a health risk classification. Your health risk classification is what determines how much you’ll pay for your life insurance policy.
The Rating System
Upon approval of your life insurance coverage, you’ll be assigned a rating class based on the insurance companies assessment of your health and risk factors. These ratings are as follows:
- Preferred Plus – Best rates
- Preferred – Very good rates
- Standard Plus – Slightly above average rates
- Standard – Average rates
- Substandard/Table A-H or 1-8 which are each 25% more expensive per each letter grade
Medical Conditions Affecting Costs
There are certain health conditions that can affect both costs, as well as your ability to secure life insurance in general. When the insurance industry considers you “rated” or “high risk”, you’re assessed differently than the majority of applicants.
Below are some examples of the conditions that can affect your rating:
- Diabetes (both types)
- Use of tobacco
- Drug or alcohol history
- Criminal history
- Driving history (i.e. DUI)
- Heart disease
- High blood pressure
- High cholesterol
- Liver and/or kidney numbers
- Sleep apnea
- Hazardous occupation
- Dangerous hobbies
- Foreign travel/citizenship issues
If you have a history of one or more of the above health conditions please be sure to give us a call so we can help you find the most affordable life insurance coverage based on your medical history.
Just because you have had or currently have one of these condition doesn’t necessarily mean you are disqualified from getting life insurance coverage. It just requires us to make sure you are applying with a company that is more favorable to your health history.
Benefits of Buying Life Insurance Online
The internet has become an excellent source for information on just about anything you need to do research on. Thinking about purchasing a brand new item like a phone or the latest electronic gadget? For many, the internet is probably the first place to look to get reviews as well as compare prices to make sure your getting that item at the best price.
The same can be said when it comes to buying life insurance online. There are a number of benefits to buying your life insurance online and below are some of the top reasons why you should.
Buying life insurance online allows you to do it at your convenience when it fits your schedule. Instead of having to make an appointment to visit with a life insurance agent to get information or quotes, searching online provides you the opportunity to do it 24/7, 365 days a year.
As we previously mentioned, the internet is an excellent place for research. Most online life insurance agencies will have a “blog” section located on their website. This section is often loaded with tons of information pertaining to general life insurance information, types of coverage options and even company reviews.
For those who need life insurance quickly, the internet can be the solution. With advanced underwriting technology, several life insurance companies have began to offer an accelerated underwriting option. This allows applicants to apply for coverage without a medical exam and possible be approved for coverage in less than 24 hours all through an online application process.
Shop & Compare
The absolute best reason to buy life insurance online is having ability to shop for the best life insurance rates. Several online life insurance websites will often have a quote tool located somewhere on the website that will allow you to view sample rates from multiple life insurance providers. This can provide a huge advantage in savings as rates can fluctuate from 10% to as high as 70% from company to company.
Tips on How to Buy Life Insurance Online
Ready to buy life insurance online? Keep these tips in mind to maximize what you get out of your purchase.
Keep it Simple
When you’re looking for life insurance policies, you may find the number of available options you have to be a bit overwhelming. Most providers will offer additional bells and whistles to their policies that have confusing terms or extra costs.
Instead, focus on the death benefit portion of the policy. This gives you a marker from which you can accurately understand and compare policies.
Stay away from policies that have complicated terms. This includes multiple riders, special terms, contractual investments, and retirement planning benefits. Remember that the purpose of life insurance is to provide for your dependents, not to make an investment.
Shop Around Before You Buy Life Insurance Online
Every company is going to offer you different policies with different prices and terms. Whether you’re healthy or not, you’ll encounter a wide range of costs in your search. By staying focused on the simple death benefits that you’re family receives in the event of your death, you can compare apples to apples and choose something within your budget and needs.
You’ll also want to keep in mind the number one rule of thumb when it comes to buying life insurance is to purchase enough to cover potential financial risks that your family could incur as a result of your passing.
Your survivors have to replace your income, pay bills, and incur other costs associated with death. As a general rule, 10 times the amount of your income is a good amount to make sure your family is well protected.
Choosing the Right Company
Beyond the cost of the life insurance coverage, you need to think of a company’s longevity when picking your life insurance provider. Picking a reputable company that’s going to be around for a long time is as important as picking the right policy.
When it comes time to submit a claim, your going to want piece of mind that the company is around to answer your beneficiaries call.
Before choosing the company, research their history and get to know them better. Read reviews and look up their financial ratings such as A.M. Best, Standard & Poor’s and Moody’s grade. Be sure that you’re choosing a company that’s around for the long term.
#1 Advice to Buying Life Insurance Online…Ask for Help
There are so many advantages to buying life insurance online but in the long run it is highly recommended you do work with an experienced agent before making your final purchase.
Take full advantage of what the internet can offer in regards to research and shopping rates. When you have found what you want in terms of coverage and the rate you would like to pay for said coverage, seek the help of an experienced life insurance agent.
By doing this, the life insurance agent should be able to answer any questions you have as well as help determine if you will qualify for the coverage. If the life insurance coverage is a fit, the life insurance agent can help assist in completing the application and guide you through the overall process.
TIP: When searching for an experienced life insurance agent be sure they are independent. An independent agent or agency such as Top Quote Life Insurance should be able to offer you several different life insurance providers. For example, Top Quote Life Insurance offers over two dozen of the top rated life insurance companies in the U.S.
By being contracted with several companies we are able to help our clients secure the best life insurance coverage at the best price based on their life insurance needs.
Is Your Life Insured?
If you have people who depend on you and you don’t have life insurance, you’re leaving them vulnerable in the event of your death. No matter what age you are or how healthy you may seem, life insurance minimizes the risk that your family can’t cover financial expenses without you.
To save time and costs, you can buy life insurance online or at least obtain a wealth of information prior to making you final purchase.
As always, never hesitate to contact us at Top Quote Life Insurance with any questions or assistance on finding great life insurance coverage.