Life insurance provides a financial safety net on which the spouse, children and other family members could be dependent on death. Buying a life insurance policy isn't always high on the list of things to do because most people don't like to think about dying. Whether you're just curious, looking for information or ready to buy, here's how to get the life insurance you need.
Life insurance can be an essential part of your overall financial plan. Having a life insurance can make it easier for your beneficiaries to pay daily expenses in the event of death. You can buy life insurance directly from an insurance company or through an agent or broker. guidelines may differ during the COVID-19 crisis.
How to get life insurance
Life insurance is not a one-size-fits-all purchase. You need to decide the type, length and amount of coverage you need. For example, you may want to purchase a 20-year life insurance policy, with a benefit of $ 500,000.
Of course, you also need to decide where to buy it. Generally, there are three places to get life insurance:
Directly from a life insurance company From a life insurance agent From a life insurance broker
Life insurance companies
If you want to go directly to an insurance company, you can generally purchase a direct term policy. This type of policy meets your insurance needs for a certain period of time, for example for 10, 20 or 30 years.
To purchase this type of policy, you usually fill out an online application, review your quotes, choose a policy and pay. Depending on the company, you may have an option to purchase a guaranteed issue policy that doesn't require a medical test. A direct term policy can be a good option for people who might otherwise have difficulty getting life insurance due to health problems.
A direct term policy can be a quick way to purchase coverage, especially if you know the exact type of coverage you want (and it seems to be something the company offers). However, if you need assistance, have questions or want more options, you're better off with an agent or broker.
The amount of money that life insurance beneficiaries will receive in the event of death is called the death benefit.
Life insurance agents
Agents and brokers sell most life insurance policies. Both act as intermediaries between insurance companies and insurance buyers. And both must have the appropriate licenses to sell insurance products in the states in which they operate. However, while people often use these titles interchangeably, there are some distinct differences.
The most significant difference is who represents the person. An agent is appointed by an insurance company to sell its products. An agent representing an insurance company is called a "captive agent", while one who is affiliated with several companies is called an "independent agent". Life insurance agents represent companies, not buyers. Their goal is to match you with the coverage of the companies they represent, which may or may not be exactly what you need.
Life insurance broker
Brokers, on the other hand, represent insurance buyers, not companies. They work independently and have no contracts with specific insurance companies. This means that they can make unbiased recommendations that meet each client's needs. Typically, brokers work with a wide range of insurance companies to provide customers with a good selection of quotes and plans.
Term life insurance is cheaper, while permanent life insurance is more comprehensive and can include cash value.
Where to buy life insurance
If you decide to work with an agent or broker, instead of going directly to an insurance company, you have another decision to make: Should you shop locally or online?
A local insurance agent or broker is a good option if you want personalized advice, are considering permanent life insurance or have a complicated situation. An agent or broker is also a good choice if you are not very tech savvy and have trouble trying to navigate an online application.
Alternatively, if you have a general idea of your coverage needs, you want a lifetime policy or you prefer to shop without help, an agent or an online broker may be right for you. Of course, you have to make yourself comfortable dealing with online business to make this option work.
Life insurance credit
Many life insurance agents and brokers have accreditations offered by industry agencies such as the American College of Financial Services and The Institutes (formerly Insurance Institute of America). Some of the common acronyms you may encounter include:
If an agent or broker you're thinking of working with has a designation (or designations) that you don't understand, be sure to ask what the acronym stands for, which agency issued it and how they earned it.
Purchase of a life insurance during COVID-19
The COVID-19 crisis has introduced some new challenges in the life insurance sector. First, face-to-face exams are difficult, if not impossible, when people are supposed to be socially distant. However, life insurance companies are open to the market, accept applications and adapt customer onboarding procedures to adapt to the changing landscape.
Some insurers, for example, have moved on to the evaluation of medical records, prescription medical history and the like, instead of sending a paramedic professional to your home to collect information. Others have extended the time frame for completing a traditional exam, while providing temporary temporary coverage. You can also connect with agents by phone or video conference and sign all documents electronically.
Don't be surprised if you see some COVID-19 related questions about your question, such as "Have you or someone in your family been tested or treated for COVID-19?" or "Have you been on a cruise for the past 60 days?" Keep in mind that if you answer "yes" to these questions, this shouldn't stop you from getting a policy, but if you answer dishonestly, it may cancel your policy later.