Life Insurance Buying Guide: Types, Companies, and Quotes

Life Insurance Buying Guide

The COVID-19 pandemic made many Americans realize that life coverage is among the most important types of insurance a person should have. Recent surveys show that many who did not have a life cover have prioritized buying a policy. But there is a problem. They are not well informed about life insurance. For example, few are aware of low-income life insurance. They may take longer to find an affordable cover. Also, there are many companies and products, and each promotes its products as the best. Thus, settling on a life cover and an insurance company can be confusing.

Do you feel uninformed or confused about life insurance?

This guide will help you understand the different types of life insurance and where to get the best deals.

Life Insurance, Definition, and Types of Coverage

Life insurance is a safety net. It is a contract between you and an insurance company; you agree to pay premiums for a lump sum compensation to your beneficiaries after your demise.

The insured often undergoes a medical exam and a waiting period as the company underwrites the cover. After accepting the request to cover, the client agrees to abide by the health and lifestyle recommendations stipulated in the contract. There are various types of life insurance. Each seeks to meet the needs of different markets.

The Types of Life Coverage

There are two main types of life insurance: permanent life and term life coverage:

Term life insurance covers the insured for a set term. It is usually 1 – 30 years. If death happens before the contract period ends, the insurer will pay. However, there is no benefit if you are still alive when the period expires. Term life is usually the more affordable option and is also popular. There are different types of term life coverage like annual renewable coverage and Instant term life cover.

Permanent life insurance works by covering an individual for the entire lifetime. It is a more expensive option. The insurer commits to compensating the beneficiaries regardless of when death occurs. But that’s not all. It is also an investment plan. In most cases, the cash value of the policy grows. Customers can also borrow against the fund.

There are different types of permanent life coverage: whole life coverage and universal life insurance.

Deciding if you Need Life Insurance

There is no doubt that life insurance is a crucial financial safety net. But if you doubt, the following questions will help you decide:

  • Would your family or dependents face financial hardships if they lost your income?
  • Would your dependents be left with a significant debt to pay in case of your death?
  • Would your dependents need to settle bills like college or healthcare?
  • Do you have a dependent’s tuition, daycare, or retirement costs lined up?
  • Do you want to pay for all end-of-life expenses, including funeral, burial, or medical bills?

If the answer is yes to any of these questions, you need a life insurance policy. But how much coverage do you need?

Figuring how Much Coverage you Should Buy

To determine how much coverage you should buy, start assessing your financial obligations. Some of the aspects to consider include:

  • Your income versus expenses: including daily bills like childcare, school, utilities, groceries, fuel, health insurance, etc.
  • Your debts: mortgages, car loans, credit card debt
  • Expected expenses like college tuition, funeral expenses, medical bills, etc

Once you have figured out the expenses, you can estimate the amount of coverage.

You can also estimate the coverage required by multiplying your income by a factor and use it as a projection of how much coverage you need. For example, you could multiply your annual income by ten.

What if you Already Have Life Insurance From Your Employer?

Employer-provided life insurance coverage is a great way to mitigate your risks. But in many cases, the validity of the insurance contract is pegged on the employment terms. The coverage is valid only while you are employed. Losing the job would mean you will be without coverage. It is not a reliable safety net. But you can complement an employer-provided life coverage with a personal life insurance policy.

Where can you get the Best Life Insurance Deals?

You can buy a life insurance policy directly from the company, through insurance brokers, agents, or online.

Insurance companies can offer quotes through online channels or face-to-face channels. Some companies offer products like life insurance with no waiting period to suit clients (especially online buyers) needs.

Insurance brokers connect prospective clients with sellers. They help customers identify, review and compare different policies from various insurers. The customer purchases the policy from the broker. However, the broker does not underwrite it or supervise policy sales.

Insurance agents represent the interests of insurance companies. They could be captive (representing only one insurer) or independent (representing multiple companies). They often work on a commission basis.

The following companies featured among the best life insurance companies in a recent survey published by Forbes Magazine.

  • Lincoln Financial
  • Mutual of Omaha
  • Pacific Life
  • Protective
  • Prudential
  • AIG

Don’t be Fixated on the Premium You Will be Paying

When comparing different life insurance companies and their products, don’t just be fixated on how much (the premium) you will be paying. The best life insurance companies offer better value. They have better service and often have high rates of timely claims settlements. Learn more about the claims settlement and service levels, then check the premiums.


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