It’s important to get expert life insurance shopping advice.
Our “Ultimate Shopping Guide” will guide you through every step – from start to finish. From quotes, to application, underwriting and paying for your policy.
Get expert life insurance advice
Approximately 18 million people have searched for life insurance but cannot make up their minds. In many cases, these people know they should get life insurance but they find it very difficult to understand how getting a life insurance policy works.
We are here to try and help you find the right life insurance policy for you and your loved ones.
We’re going to help and guide you through the process of purchasing a policy online through Life Insurance Blog so you can protect your family from facing financial disaster should you pass away.
We made this infographic to start with, but scroll down for the meat and potatoes of how to shop for life insurance.
What to expect when buying life insurance
Getting life insurance is one of the most important steps you will ever take. Let’s go through how to get coverage in a simple and convenient way. Here’s what you can expect when shopping for a basic term life insurance policy.
Decide what kind of coverage you need
First, you should sit down and figure out how much life insurance you are going to need. Do you want just enough to replace your paycheck or do you have debts you want to have paid off should you pass away? Make a list of all of the items you want to be covered and you can use our guide to help you find out how much life insurance you need.
Compare rates by betting quotes
Once you have figured out how much you will need, it’s time to start shopping around for the best insurance policies and find out what you may expect to pay for it.
There are some things you need to keep in mind when shopping for a life insurance policy.
- Pressure. Stay away from agents or sites that use high-pressure sales tactics. Even though you know you should get a policy in a timely manner, don’t let someone push you into something you don’t want. Take your time and compare companies and their plans before making a decision.
- Price. Don’t just buy the cheapest life insurance policy you get a quote from. That policy might not be the best value once you examine the different plans from different life insurance companies. Keep in mind, if you have health issues or are a smoker, some insurance companies might charge more for that policy. That means your original quote isn’t what you’ll pay after you apply.
- Health. Your health affects your rate big time. Make sure the quotes you are receiving match your specific health status. If you have a preexisting condition, it can drive up costs. Note: if a site does not request your health status before giving you a quote, chances are the quote is far from accurate.
- Warning. In order to compete, there are some websites and agents that will give you the lowest rate available without qualifying you. You may not qualify for the quotes you received! First off, life insurance premiums that you will actually pay will be based on your health, lifestyle, and your family’s health history. In many cases, online life insurance quote engines, by default, will assume you are in the best of health and default to the lowest risk class. This simply means, the default rate is for someone in perfect health. A “best case” scenario for rates.
Wondering what all of the details and terminology listed on your quote? Read our post on how to understand your online life insurance quotes.
Compare different health class ratings
Always check a range of health class ratings for your online life insurance quotes. It’s smart to see which rates are good for you and what you may qualify for. If you are in great health be sure and choose “Preferred” in the selection menu.
On the other hand, you should choose “Standard” if you are not in perfect health or are on a few medications.
Choosing the right level will give you a much more accurate result in rates and give you a better understanding what you will probably be paying for your policy.
In this video, we walk you through how to get accurate quotes using our instant life insurance quoters.
Keep in mind, pricing varies even if the policies are exactly the same so don’t grab the first quote you get. You really should work with an independent life insurance agent or broker to weed out the differences so you will be able to choose the best one for you.
Always check out an insurance company’s rating before making a decision. You can search companies by visiting sites such as Moody’s, Standard & Poor’s, Fitch.
Once you have found a policy that’s right for you, understand that it will usually take 6 weeks or longer to underwrite your life insurance policy. Because it does take a while for an underwriter to finish the policy, it’s really important not to waste your time on the wrong insurance company.
In one recent case, a young woman came to us after applying directly online with a certain life insurance company. She wasted four weeks in underwriting and was ultimately turned down due to a specific heart condition. This can make it really difficult to get a policy later on. The good news is we were able to help her out by pivoting to a competing company that wasn’t as strict with heart conditions.
Pick your life insurance policy
Once you have found the quote that works best for you, you will be given options from the top life insurance companies. The prices will be displayed so you will know exactly what you are applying for.
Now it’s time to complete your application. Your Life Insurance Blog agent will gather your information to complete a simple online application. Your information and details are completely private and never shared with a third-party. Your information is safe and only seen by the insurance company we are applying with.
It only takes a couple of minutes to fill out our easy form online. Once you have submitted it to Life Insurance Blog, your personal agent will review the information and make sure everything is filled out properly. If anything is missing, they will get any further information from you that is needed and then submit it.
Your agent will also make sure the insurance company you have chosen is the right match for you.
For instance, if you have a specific health issue and we know the company you selected will not offer you the best price because of it, we will suggest another company in its place. That said, it’s still completely your choice who you go with, we just want to make sure you have all of the available options to you from start to finish.
After everything has been completed, you’ll complete our simple application to complete electronically then we will, securely, send your application to the life insurance carrier. Most carriers also have a phone interview as part of their application process.
Once everything has been completed, the life insurance company underwriter will look over your application. The underwriter will be analyzing your health, your lifestyle, family health history, and other aspects of your life to decide the right premium for you. This process is known as underwriting and can seem a little daunting if you’ve never done this before.
What if you’re in poor health & looking for life insurance?
How will the underwriter look at your situation? Well you could possibly avoid a medical exam altogether by purchasing a No Exam Life Insurance policy or a guaranteed issue life insurance policy from us. It’s easier and quicker to purchase than a policy that requires a medical exam. A guaranteed issue policy usually offers a lower death benefit amount and usually is only available in specific age groups such as 50 to 80. However there are some companies that offer these policies at younger ages.
Medical exam or No exam policy?
Most life insurance companies require that you have a simple medical exam. It’s completely free of charge and the examiner will either come to your office or your home, whatever is more convenient for you. The examination will be scheduled to fit your schedule.
Also, many life insurance companies now offer no exam life insurance policies so you can skip that part of the application process. A no exam policy will reduce your waiting time by quite a bit and some companies will have instant approvals or same day approvals. No exam policies can sometimes be more expensive in comparison to a policy that requires a medical exam. For many people, this is a very popular choice, especially if the difference in cost is insignificant.
Set up an appointment for your telephone interview
After submitting your life insurance application, a representative will contact you for your confidential phone interview. This should take less than an hour. The representative will mostly be looking for consistencies in the application and whether they need more details regarding your lifestyle or health.
For instance, if on weekends you SCUBA dive, this could affect the underwriting process and how much you’ll pay for your policy. Once the interview is over you will have to schedule a time for your medical exam (if it’s required). Please feel free to check out our blog for more information on how to prepare for your life insurance phone interview.
The underwriting process
Once everything is completed, from the application all the way through the medical examination, you will have to wait for a decision from the life insurance company.
This process is called the underwriting process. It’s where the company looks at all your information and determines the risk involved to insure you. But do all life insurance companies look at you the same? How you’re ultimately rated will greatly depend on your specific health and lifestyle.
If you are in relatively good health with no risky lifestyles, you will probably be approved for the policy and at the cost you have applied for. If there are issues, you will be contacted to explain your options to ensure you get the best coverage that’s available.
We will keep you updated on the approval process and once your policy is ready, we will send it to you either through the mail or email. All you have to do is sign some paperwork, authorize your payment method, and You Are Done!
Now your coverage begins
Once you have signed your contract and made your first payment, the policy goes into effect. Keep in mind, most policies have a contestability period for approximately 2 years. During that time, the insurer can cancel your policy if they discover you have misrepresented something on your application.
Once the first 2 years have passed, the life insurance company can still make adjustments to your life insurance policy if they investigate and find that you’ve given them the wrong information.
Review your policy from time to time
Term life insurance is something we hope you will never have to use but should something happen, your family will be well taken care of. Always keep your life insurance policy in a safe place and review it from time to time.
Once in a while, you should look over your policy, especially if there has been a major change in your life, such as purchasing a home, getting married, or the birth of a child. You will be able to compare your current financial obligations against your policy. You want to ensure your coverage is adequate such as finding out if you are over insured or underinsured.
You can always shop around for a new policy for either less or more coverage. Check your plan to see if it came with a guaranteed insurability provision so you can add more coverage without having to undergo a medical exam and re-apply all over again.
The end of your policy
A term life insurance policy means that your coverage will stop on the policy’s end date. If you have been making adjustments to your coverage over time, then possibly when it ends you will no longer need the protection of a life insurance policy. Maybe your financial obligations are no longer an issue or you have saved up enough money to cover these debts yourself.
Should you pass away while the policy is active, then the insurer pays the full death benefit to the person you named as your beneficiary.
If at some point you stop paying on your policy, it will be canceled by your insurer. Most policies have a 30-day grace period for making the payment on your policy. You really should make the payment instead of letting it lapse. With life insurance replacement, you can always make an attempt to get the same coverage at a cheaper rate. Keep in mind, if you have to start over and find another policy, the older you get the more expensive life insurance will be.
Please share this information with family and friends who are still sitting on the fence trying to decide whether they want to get life insurance or not.
Top tips for shopping
Here are some of Life Insurance Blog’s top suggestions that should be considered when purchasing a life insurance policy.
Use an independent life insurance agent
One of the most important tips answers one of the most frequent questions: Can I save money buying direct from a company or an agent? Some are shocked to find out that the price will be the same as long as you’re comparing the same products from a company.
For example, if you buy a 20 year term life policy from Company A – the price is the same if you buy direct or from an agent. Prices are fixed by law, so there aren’t any blockbuster weekend sales for life insurance.
Provide accurate information to your agent
Withholding important details from your agent in order to get a “better quote” is one of the biggest mistakes shoppers make. If you pass away and a claim is requested, but you gave dishonest information on your application, the insurance company may deny it.
Life insurance companies use your medical exam, can order current and past medical records, check the MIB, and a variety other measures to make sure they understand who they are potentially insuring.
Always be honest about your health so your agent can find the best policy for you. Usually, a physical exam is required for both term and whole life insurance. Even though there are some No Exam insurance policies that do not require the medical exam – most companies know they are taking a risk if they do not know your physical health. Most whole life insurance policies do require a physical exam.
Your agent’s job is straightforward. They’ll shop your case and find the best policy on the market based on your health and lifestyle – but you need to provide them accurate information so the policy you get will pay out when it’s needed.
Why you should purchase a term policy
Term life insurance is much easier to understand. It’s why financial celebrities like Suze Orman and Dave Ramsey recommend it. Term life is cheap and it’s a much more affordable product compared to a permanent policy. You can always opt to buy term and invest the difference.
Permanent life insurance policies such as whole life, universal life, or guaranteed universal life is more expensive. It’s actually smarter to choose a basic policy so you are not cutting into your retirement savings.
How long should a term life insurance policy run?
You should typically get a policy that will run for 10 years or longer. Although there are some term policies that only run for a year, there is a good chance your premium will increase each time you renew it. Most people want coverage that will last for the full length of time they will need coverage. For instance, if you have a loan that you know will take 10 years to pay off, you shouldn’t buy a policy that only lasts for 5 years and then buy another one for another 5 years. One, why go through getting a new policy all over again? Two, the older you get the more you will have to pay for your life insurance, which means your new policy for another 5 years will cost more.
Another thing to take into consideration, do not buy more life insurance than you need. If you have a 20-year mortgage and you purchase a 30-year policy, you will probably be paying for the extra 10 years that you don’t need. Take a moment and calculate how much life insurance you need so you can decide the level and length of coverage you will need based on your finances and personal needs.
Does your policy have an incontestability provision?
This will guarantee that after your initial period of time, which is normally 2 years, the insurer cannot cancel your policy as long as you pay your premium as agreed upon. That said, the insurer can modify the policy if at some point they find out you misrepresented yourself on the original life insurance application.
Make sure you have a grace period
Most policies have a 30-day grace period to make your premium payment after the initial due date. If something happens and you will be late on your payment, this will protect you for 30 days and your policy will not be canceled.
In some cases, if the policyholder dies just before the premium due date and the final payment is missed, the grace period will give the survivors a little room to correct the oversight by making the payment so the policy is not be canceled.
Of course paying by automatic bank draft is a great way to avoid this potential headache.
Make sure you have options
Be sure that your life insurance policy can be converted into a permanent policy if you wish. No one can see into the future. If your financial situation or your health changes, it would make sense to convert your policy to a permanent one. Chances are, that won’t happen but it’s a good idea to know you have that option. We never know when we could get a serious condition that could make future coverage difficult.
You should consider certain riders carefully
There are some life insurance riders that can be added to your policy but most people do not believe they are worth the extra price tag. That said, there are some policies that include these additional benefits for no extra cost. Remember that when you are first looking for life insurance and ask your agent what riders are included or extra.
Accelerated Death
Should you be diagnosed with a terminal illness, the accelerated death benefit will allow you access to your death benefits while you are still alive so you can pay your medical expenses. Some policies have this included by default while others may charge extra for it. Look into this when you are comparison shopping!
Annual Renewable Term
Annual renewable term is a policy that you renew each year but your premium will go up each year.
Accidental Death and Dismemberment
This added coverage pays extra if you die due to an accident that is listed in the AD&D rider or if you lose your sight, lose a limb, etc. That said, you really should avoid this unless you work in a high-risk environment, it’s really not worth the extra cost. AD&D riders are created to offer a very narrow range of extra coverages and insurance providers rarely pay claims on them. Just ensure your main policy offers adequate coverage.
Waiver Of Premium Rider
The waiver of premium rider pays your premium should you become disabled for a long period of time. Therefore, if you cannot make payments on your life insurance due to a disability, chances are you cannot pay other bills either. In addition to your life insurance, it makes perfect sense to purchase long-term disability as well. It will help cover your monthly expenses while you are disabled.
Child Protection Rider Or Child Life Insurance
The child rider will pay a death benefit should your child die. The death of a child is possibly the worst experience a parent can have. This rider will provide a benefit that would allow you to grieve & take time from work without worrying about bills and finances for a duration of time.
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Your guide to the application process
Under normal circumstances, the application process will take between 3 to 4 weeks to complete. The clock starts when the application is submitted and ends when you pay for your policy. If longer, it’s usually because the applicant has a complicated health history and their doctor must submit a medical report to the insurance company. In many cases, the doctor’s office is very slow at providing this information and is the reason for a delay.
Filling out the application
This should only take about 20 minutes to fill out. Most applications are completed either online and/or over the phone. You’ll provide some basic personal details, beneficiary information and your employment information.
Depending on the type of policy or carrier, be ready to provide income documentation such as your most recent tax return or letter from your employer (usually from the HR Dept.)
Sign the Authorization Forms to release your health information to the life insurance provider. Again, most of these steps are completed easily online with e-signatures, but some carriers still require wet signatures.
Read more: Is the Process of Buying Life Insurance Online Easy?
Your medical exam
This normally takes about 30 minutes. A nurse or technician will come to your home or office at a scheduled date and time.
He or she will get your height, weight, take your blood pressure and pulse.
They will take a blood and urine sample. Some insurance companies do not require this step if the benefit amount requested is less than a certain amount.
Medical exam preparation
- Schedule your exam for early morning.
- Stay away from caffeine, alcohol, and sugar the 24 hours before your exam.
- Stay away from over-the-counter medications as they can interfere with the test results. (6 to 8 hrs before)
- Don’t eat until the exam is completed.
- Do not perform strenuous exercise (1 hour before the exam)
- Do drink water to ensure you can provide a urine sample.
The results from your medical exam, including the blood test and urine test, will be submitted to the insurance company’s underwriters. Additional medical records may be requested from your doctor if needed.
About your phone interview
This usually takes approximately 30 minutes depending on the carrier and your health & lifestyle. The insurance company’s representative you call you at the scheduled date and time and ask about your health history and lifestyle ( your hobbies, frequent travels, etc).
Your agent or broker should give a list of questions beforehand so you will be prepared and know what to expect.
Have the name, address, and phone number of your primary medical provider available. Have the names of any medications, physicians, and procedures you currently have or had in the recent past.
Your approval
As long as everything went well during your physical exam and phone interview, this will be sent to the underwriter for a final approval which usually takes 2 to 4 weeks to complete.
Depending on your health, the insurance company may contact you for further information or to request additional medical records. This can add more time to the underwriting process.
Once your policy is ready, your agent or broker will deliver it to you. You will have to sign a delivery receipt and authorize your payment method in order to activate your policy.
When does your policy go into effect?
Once your application has been approved, your insurance company will notify you and request your payment. You might be given a binder which is a certificate of proof that your policy is active while you are waiting for the official policy to arrive.
Make sure you place your policy in a safe place along with a copy of your application. Most people place these documents with other important documents so you can reference them in the future. Also, you should inform your beneficiary about the policy and where they will have access to the document.
Applying and buying life insurance online
As life insurance is a very important investment, it’s really important that you get the best policy for you and your loved ones. If you have any questions or concerns, please contact us today. If you want to learn more money saving tips, be sure to check out our Life Insurance 101 resource. It provides tips and help on a variety of shopping topics.
Because we are independent agents, we work with many insurance companies, not just one. Let us do the work for you – we’ll find you the lowest insurance rates and best plan. Don’t try to do this on your own – it could take days of calling around to different companies and you’ll still be wondering if you found the best policy. Life Insurance Blog can directly present you with personalized quotes from all of the top companies in the marketplace.
