The Ultimate Guide To Buying Life Insurance

From Insurance Lounge

Buying Life Insurance in Oregon and Beyond…

Buying life insurance is a critical step in protecting the future of your family. Many families are reliant on the incomes of one or both parents, but they also have future plans that life insurance can accommodate. For example, if you plan to send your children to college or you want your spouse to have the ability to pay off the mortgage, life insurance can accomplish all of these goals- tax free. Arm yourself with some educational information before getting started in the life insurance quoting and application process.

Types of Life Insurance

There are three primary types of life insurance: term life insurance, whole life insurance, and universal life insurance. Term life insurance is generally the most popular because it provides affordable coverage for a set period. At the expiration of that period, the premium cost skyrockets. During the course of your term policy, you should be eligible to convert it to a whole life or universal life policy if you’re interested. A whole life policy is very popular for children, because you receive coverage for an applicant’s entire life and can build up cash value in the form of dividends. Similar to whole life, universal coverage is lifelong and there are many different product varieties designed to meet your unique needs.

Consider Your Needs Before You Quote

Your life insurance quote is going to be based on multiple factors, but chief among them is the amount of coverage you’re seeking. One of the most typical needs that individuals buy life insurance is to replace income. Many people get coverage in the amount of 5-10 times their annual income to allow the spouse and surviving children to have an opportunity to survive financially. If you’ve got a mortgage, outstanding debt, future college costs, or other expenses, factor those into the total coverage amount.

The Basics of Ratings

Carriers provide quotes based on rate classes, which take into account your age, state, and health at the application process. Be aware that your height and weight, among other factors, can significantly impact the rate class you apply for. You can apply for a high rating class  (often known as preferred or preferred best), but the carrier may award you a different class after you go through a paramedical exam and after they have reviewed any necessary medical records. If you have something in your health history that might be seen as a red flag, it’s worth shopping around. Different carriers have different tolerances to specific issues. For example, some carriers treat occasional cigar smokers as members of a nonsmoker category, and some carriers would decline a person with a history of cancers whereas others might consider it based on further details. The bottom line is that shopping around and investigating your options can make coverage available and more affordable.

What Happens After The Application

For most carriers, you’ll need to complete a paramedical exam. This will verify lab information and smoker/nonsmoker status, and an examiner will come to your house to complete the necessary work. Your case will then enter the underwriting process, where a trained individual assesses the risk of your case and verifies that you meet the qualifications for the rate class. You’ll then be awarded a policy and receive your official documents.