Buying Life Insurance Online: What you need to know!
Are you thinking about buying life insurance online? If yes, you’re certainly not alone; today, life insurance is incredibly popular among consumers of all ages. Life insurance is clearly one of the many important purchases you’ll make in your life. And yes, failure to buy life insurance in a timely manner may only do your family and loved ones more harm than good (especially when you’re no longer with them).
So how can you go about buying life insurance? Well, first off, there’s no doubt that we as Americans love the whole idea of getting what we want in the quickest possible time. Yes, we do procrastinate but of course, when the time comes, we just get it!
The good news? You can buy life insurance instantly; even right at this moment!
If you go back about 10 years, buying life insurance was a lengthy and tiring process. You had to call several different life insurance carriers and of course, talk to a whole lot of insurance agents to get a policy.
That’s not all — you’ll still had to carve out time from your busy schedule to meet the agents and fill out long (somewhat complicated) applications. After this you would have to make time to get an exam completed if required for the life insurance. In a nutshell, the process wasn’t all that easy.
But today, anyone and everyone can buy life insurance online and get covered right away. Many websites even offer free instant quotes coupled with extensive product information that can increases your chance of making a sound decision.
With this in mind, you you will want to keep a few tips in mind when you’re ready to make the move. Or better still, when you’re set to buy life insurance online.
This post will explore up to just about everything you’ll want to know. Let’s dive in!
First off, it’s important to get an idea of how much insurance you need before kick-starting your journey. In essence, you’ll want to consider everything from your assets and debts, your current lifestyle, your upcoming needs, and who depends on you especially financially dependent.
It’s also crucial to figure out how much you can pay every month as well as how your expenses may change in the long-run. You may also want to figure out if you’re going to need coverage for other items besides funeral expenses and mortgage.
Once you get a better idea of these things, you’ll be able to get a clearer picture of the amount of coverage that’s sure to work great for you. Most financial experts agree it’s good to have somewhere between 8-10 times your salary in life insurance.
Learn More About Your Coverage Options
Moving forward, it’s good to point out that there are quite a few life insurance products on the market. This can make buying life insurance online confusing at best, especially if you are navigating the process alone.
There is alot of information, but here we will give a you brief description of each type. There are 3 main types of life insurance products offered. They are:
- Term Life Insurance
- Whole Life Insurance
- Universal Life Insurance
What is Term Life Insurance?
Term life is the most popular life insurance product purchased in the United States. The main reasons for this is the cost and the simplicity of the policies.
These types of policies provide death protection for a chosen amount of years. The term periods offered are usually 10-30 years depending on the age of the applicant.
Term life does not build up cash value and will expire at end of the term period chosen. I like to think of term life as you are renting the coverage for certain amount of time, rather than buying it.
What is Whole Life Insurance?
Whole life insurance is probably the most common type of permanent life insurance that comes to most consumers minds when the topic comes up. Whole life policies last for the insureds lifetime while building up cash value.
Whole life insurance can be broken down into 4 categories:
- Participating Whole Life- These policies also earn a dividend along with the guaranteed cash value accumulation.
- Non-Participating Whole Life- Only accumulate the guaranteed cash value, no dividends for these types of whole life policies.
- Final Expense- Final expense whole life offers simplified underwriting, which means if you have had some health problems you may still qualify for this type of whole life policy. Face amounts are usually capped at $50,000.
- Guaranteed Issue Whole Life- Guaranteed issue life insurance is for consumers whose health or personal circumstances are so bad that they can’t qualify for a traditional policy. These policies come with a 2 year wait period on claims except for accidental death. Premiums tend to be pricey because everyone is accepted.
The major drawback to whole life insurance is the premiums can be a little pricey depending on your age and how much life insurance that you are looking for.
What is Universal Life Insurance?
Universal life insurance or adjustable life insurance is a permanent policy, just like whole life. The main difference between the two is that universal life policies have flexible premiums and flexible death benefits.
This means you can adjust the premiums and death benefit throughout the life of the policy. Please note that if you increase your death benefit that will require additional underwriting.
Universal life insurance is broken down in 3 main types. They are:
- Guaranteed Universal Life
- Indexed Universal Life
- Variable Universal Life
Guaranteed Universal Life (GUL)
A guaranteed universal life insurance policy or GUL is the most similar to a whole life policy because it comes a guaranteed premium and guaranteed death benefit. The main difference between the two is how the cash value and interest is calculated.
Whole life policies are going to build up more cash value than a guaranteed universal life policy will. But with that said, a GUL will have a significantly lower premium than whole life does.
Indexed Universal Life (IUL)
Indexed universal life or IUL for short, is used when consumers are looking to build up more cash value than a GUL. An IUL cash value is tied to stock market indexes such as the S&P 500 and Nasdaq.
The appeal of these policies is that IUL cash value has a floor, which means you don’t lose money when the stock market is negative. The worst you can receive is 0% and with some companies 1%.
The interest that is earned is also capped, which means you are only allowed to earn a certain percentage. Most caps are somewhere between 9%-12% depending on the life insurance company.
It’s important to note that IUL policies usually don’t come with a guaranteed premium, which means if the policy doesn’t perform as illustrated, a premium increase could happen.
With the proper funding and annual reviews, this circumstance shouldn’t arise. It’s key to fully understand the “in’s” and “out’s” of an indexed universal life before purchasing.
Variable Universal Life (VUL)
Variable universal life insurance or VUL is probably the most complex life insurance product offered. Its a permanent life insurance policy with the cash value is invested into sub accounts which mirror mutual funds.
These sub accounts feel the full fluctuations in the stock market which can make it very volatile. We highly recommend working with an experienced agent who has knowledge with these types of insurance products.
Please note we recommend never purchasing a variable life product online. These policies have fees and other costs attached that need to be fully looked over before purchasing.
At this point, we really don’t have to emphasize how important life insurance is for every family to own. It’s one of the most important purchases that will give you peace of mind that your loved ones will be taken care of in the event of tragedy.
With this in mind, it’s in your best interest to shop around and compare your options before purchasing a life insurance policy online. It’s good practice to research the life insurance company and the agency that you are working with.
A simple “Google” search will usually give you all the information you need, the good and the bad. If no information can found with a search then it’s probably a good idea to work with someone else who has a more online presence.
The good news? Today, you or any other interested individual can request quotes online and yes, you can be sure to get them in minutes.
And of course, if you’re satisfied with the features of your chosen product, you can quickly apply online. It’s actually as simple as filling out a basic form, answering a few questions and giving the life insurance company permission to get additional health information from you.
Want to start shopping around? If yes, you certainly won’t be wrong to start with us! Request an instant quote today and learn exactly how we can get you covered.
Just in case you choose to shop around, be sure to check for security and privacy statements that shed more light on each company’s standards and policies.
What’s more, it’s highly recommended to ensure that your personal information is protected when requesting quotes or applying for coverage online.
A general rule of thumb is to look for a closed padlock symbol in the address bar or better still, an “s” right after “HTTP” in the site’s URL. Be sure to check ours to get a better idea of what we’re talking about.
Once you have applied online and been approved, you’re will receive receive your policy either by mail from your agent or some companies send the policy via email.
At this time you will want to review the policies content to make sure everything is correct. Most life insurance companies give a 10 “free look” period. This allows you to return the policy and receive a refund if you decide not to take the coverage.
Yes, the simple act of looking and reading through your policy can increase your confidence in your life insurance purchase and that of course, is a big part of the plan.
So what now? Well, it’s about time to move forward with your plan to buy life insurance online. Remember, there’s nothing more important than entrusting your peace of mind and loved one’s financial future to some the best life insurance companies around.
And of course, we happen to be one of them! So yes, you can always reach out to get the most accurate quote today and of course, rest easy knowing that the purchase will be as quick and painless as can be. If you have any questions or comments please don’t hesitate and give us a call.