Researching and buying the right life insurance policy is easier than ever thanks to modern technology. You can now apply for quality coverage from your computer, phone or tablet — and all at a time and place that’s convenient for you.
That’s not to say buying life insurance is a process to take lightly. It’s an important decision that helps financially protect your family for the next 10, 20, 30 years, or for your lifetime if you opt for permanent coverage. But, with a little research, you can ensure that you’re buying the right amount of coverage, the right type of coverage and that you’re getting the best value for your hard-earned money.
Read on to find out what kind of questions you need to ask and steps you should take to easily get the right policy for you.
Who needs life insurance?
If you have people who financially depend on you, whether it’s your partner, your children, or even your parents, then buying life insurance is the right move.
Life insurance can help provide for your loved ones if you were to unexpectedly die. If you’re married or in a committed relationship, how would your partner be able to pay the mortgage or household bills if you were no longer there? If you have children, how would their childcare and education be provided for?
The right amount of coverage should help your family with expenses like:
- The mortgage or rent
- Shared debts — such as credit cards or car loans
- Child care and other dependent expenses
- Funeral expenses
- A financial cushion for emergencies
When do you need life insurance?
Many people need life insurance when your mindset goes from me-to-we. This happens when you get married, have kids, or when someone else relies on your income to help pay for bills (like those private student loans that your parents may have cosigned on.)
There’s no wrong time to get life insurance. The benefit of buying it when you’re young and healthy is that your rate will be lower and you can lock in more affordable premium pricing.
Is life insurance worth it?
There’s usually a question that lingers when you’re going through the researching and buying process: Is life insurance really worth it? If you’ve reached the point where a spouse, child, or family member relies on you financially, then the answer is pretty simple: It’s absolutely worth it.
Since we plan to be around for all the significant milestones our family will face, considering the “what if” scenario of dying before our time can seem like a far-fetched concept. However, having a life insurance policy isn’t about you — it’s about the financial backup plan you’re putting in place for your family.
Term life insurance, in particular, can be a very affordable way to protect your family during the years they need it most. For example, a healthy, 35-year-old woman can buy a 30-year, $500,000 Haven Term policy, issued by MassMutual, starting at around $32 a month.
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What kind of life insurance do you need?
It may take a little research to determine which type of life insurance is best for you and your family. Two very common types are permanent life insurance and term life insurance.
Whole life insurance is a common form of permanent life insurance. That means that you own the policy (as long as you pay your premiums) until your death, no matter how long you live. This type of policy has the advantage of greater longevity, but it comes at a price. Premiums for whole life insurance are significantly higher than what you’ll pay for term life insurance. Whole life insurance also has a cash accumulation feature.
Term life insurance, on the other hand, is coverage for a specific period of time, or term. In other words, it has a shelf life, and there is no cash accumulation component. With term life insurance, you select the length of time that makes the most sense for your family, whether it is a period that takes you through retirement, your kids through college, or until that mortgage is paid off. Term life insurance is relatively inexpensive because it is for a set period of time.
For many people, term life insurance is an option that makes sense for both their monthly budget and their future plans. It’s also the only type of policy we sell at Haven Life.
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Five easy steps to buying term life insurance online
If you’ve decided that a term life insurance policy is a good fit for your needs, it can be easy to buy online. Not long ago, one of the only ways to buy life insurance was through a sales agent. This process often involved in-person meetings or multiple phone calls, paper forms, and an in-person medical exam. Today, it’s possible to buy life insurance almost entirely online. While you may need a medical exam (administered in a location of your choosing) the process is designed to be hassle-free. In order to seamlessly purchase a policy, make sure you have your personal info on hand and are prepared to enter some health history info in the application.
Step one: Determine how much life insurance you need
The first step in buying life insurance is figuring out the best coverage amount for you and your family. This depends on factors including your age, income, number of dependents, and debt level. An online life insurance calculator can help guide you to the best potential option for you.
Step two: Get a term life insurance quote
Once you’ve determined how much life insurance you need, get a quote for what that coverage would cost. A free quote tool can give you a ballpark figure. It’s also smart to price compare across different insurers. When you compare, keep in mind not just the quoted cost, but things like term length, face amount, and limited exclusions to ensure you know exactly what you’re paying for.
Step three: Check life insurance provider ratings
A life insurance policy is only as good as the paper it’s written on. Independent rating agencies such as AM Best research the financial strength and ability to pay claims for all insurance companies. These ratings can serve as indicators of the reliability of an insurer. We’d recommend providers rated A+ or better. Our Haven Term policy is issued by MassMutual, an A++ rated insurer by A.M Best.*
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Step four: Apply for coverage
When applying for life insurance, you should be prepared to tell the insurer information about your occupation, lifestyle, health, and personal and family health history. Additionally, be prepared to thoughtfully name a primary beneficiary because you will be asked to do so at the end of the application.
With Haven Life, you can easily fill out all this information online. And, in many cases, you can even get an immediate decision on coverage eligibility. There’s no need to wait 4-6 weeks while your application is reviewed.
Step five: Take a medical exam
Depending on your application, you may need to get a medical exam to finalize coverage on a medically underwritten life insurance policy. If this is the case with your application, you need to schedule a medical exam, which can be done in your home or office, as the final step of the application process. Often, you will have temporary coverage until the medical exam is completed and you receive a final decision on coverage eligibility.
With Haven Life’s InstantTerm process, some applicants will qualify to skip the medical exam. That’s because, in partnership with MassMutual, Haven Life has built technology that can analyze application information in real time. If the insurer has a good enough understanding of your health and risk, the formality of an exam may not be needed. However, it’s very important to be honest when completing the application. The issuance of the policy or payment of benefits may depend upon the answers given in the application and their truthfulness.
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While a term life insurance policy is one of those things you hope your family will never need to use, it’s also one of those things that has so many benefits to buying today, as opposed to tomorrow, next week, or next year. While nothing in life is guaranteed, buying a term life insurance policy today ensures that your rate will stay locked in at the same monthly price for the length of the policy term. Not only does this offer peace of mind (and helps make budgeting simple) but buying a policy now is one way to help prepare for the future, and the process couldn’t be easier or less daunting. So get a quote. Research options. Apply. And do all that while waiting for your pizza to be delivered. Now, that’s #adulting at its finest.
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Rachel Parisi is a freelance writer and attorney. She focuses her writing on insurance, financial services, and employee benefits. In her previous life, she served in the United States Air Force as a missile combat crew commander (think ‘Wargames’).
MassMutual and its subsidiaries C.M. Life Insurance Company and MML Bay State Life Insurance Company are rated by A.M. Best Company as A++ (Superior; Top category of 15). The rating is as of July 1, 2018 and is subject to change. MassMutual has received different ratings from other rating agencies.