In today’s article we want to try to focus on a very important topic which is “How someone should apply for life insurance”.
In this article, we’re going to try to “shed” some light on what you the “customer” should be thinking about as well as how you the “customer” can also determine if you’re online life insurance agent is doing everything he or she can to try and secure you the best possible life insurance rate out there.
If you’re just beginning the process of applying for life insurance online or you’ve already applied for life insurance and are just wondering if you did everything “correct”, we’d definitely recommend that you keep on reading!
How to apply for life insurance.
Step 1: Be able to State Out loud Exactly Why You Want Too Buy Life Insurance.
All too often people will simply decide that they’ve reached that “imaginary” age where it now makes sense for them to purchase a life insurance policy. From there, they decide to go out and purchase a certain amount of coverage for a certain amount of time, only to find out— 5, 10 or even 15 years later— that the insurance they purchased wasn’t what they really needed.
This is why it’s so important to actually be able to say, in a complete sentence:
“I am purchasing my life insurance so that…..”
Now there is no right or wrong answer as to why you are purchasing your life insurance, all this does is help determine what type of life insurance is best for you.
Here is an example where someone with the right intentions simply ends up buying the wrong type of policy.
48 year old client wants to purchase a $500,000 30 year term life insurance policy to protect his wife and two children who are 8 and 10 years old.
Upon seeing just how much a $500,000 dollar 30 year term life insurance policy will cost, the client decides that he would rather purchase a $350,000 dollar 30 year term life insurance policy so that the payment would be more affordable.
Makes sense correct?
We’ll maybe not, you see had this client actually vocalized his reasons for purchasing life insurance, we would have learned that he was looking to:
- Cover the cost of his remaining 15 year mortgage.
- Cover some of his lost wages as a result of his early death.
- And make sure that his children would be protected.
Now did he do this by reducing the amount of coverage that he purchased from $500,000 in coverage to $300,000? Maybe, but chances are that should this client pass away a year from now, his family probably would have benefited much more from the additional $200,000 dollars in coverage that he simply felt was too expensive.
So let’s ask ourselves…
Wouldn’t it have been better if he had kept the $500,000 in place and simply reduced the amount of years the coverage lasted for to let’s say “20 years” instead of 30?
In 20 years, the house would be paid off, he’d be 68 years old and hopefully retired and his children would now be 28 and 30 and on their own, and God forbid should he happen to die before the 20 years came up, his family would actually receive $500,000 instead of just $300,000
Now without verbally saying…
Aloud what exactly this client hoped to achieve buy purchasing his life insurance, would he have been able to reach this conclusion? We don’t know but being able to state exactly why you need insurance is certainly going to go a long way towards getting the right “kind” of insurance.
Step 2: Understand Your Options:
Now we’re not suggesting that you need to become an expert when it comes to understanding all of the idiosyncrasies when it comes to the life insurance industry, but having a general understanding of what a Term Life Insurance policy is and what a Whole Life Insurance policy is certainly something you’ll want to know.
Now, we’re going to provide a brief definition of each in just a second, but before we do that we want to give you 7 questions that you should use when purchasing your life insurance policy.
7 Questions you want to ask about your life insurance policy so that you’ll have a pretty basic idea of what you’re considering buying:
- How much will my family receive when I die?
- Will the amount that my family receives when I die ever change throughout the policy?
- How long will my policy last for? (Term vs whole life)
- Can I “outlive” my policy? (avoid burial life insurance policies that expire at age 80)
- How much do I need to pay per month for my life insurance policy?
- Will my payment ever change during the life of the policy?
- Will my life insurance policy pay my beneficiaries if I die from a HEART ATTACK 5 minutes after I’ve purchased it? (Life insurance vs Accidental death insurance)
Term Life Insurance Defined:
Life insurance that pays a benefit in the event of the death of the insured during a specific time period or “term”.
Whole Life Insurance Defined:
Life insurance that pays a benefit of the death of the insured which also accumulates a cash value.
Having these answers in hand along with the “basic” difference between Term Life Insurance vs Whole life insurance will go a long way towards finding the right “kind” of life insurance policy.
Step 3: Buy Life Insurance Like You Would a New TV.
Who doesn’t love to go to Best Buy or Wallmart or any other “big box” stores and just stare at the “Wall of TV’s”!
“This one is a LED 1080p, Smart TV with a refresh rate of 60 times per second and has 2 USB ports”
And before we lose you here…
We’ll be the first to admit that we have no idea what half of this means, but when we’re looking for a TV, we still want to look at these descriptions and compare one TV vs another, and so should you!
So what we’re trying to say is…
Before you just decide to go out and buy a life insurance policy, would you like to do a bit of comparison shopping? Doesn’t it make little sense to say….
Take a look at how the top 10 life insurance companies compare for price
We think so which is why we feel that simply requesting a quote from an insurance brokerage that has the ability to work with dozens of life insurance companies will go a long way towards finding the “right” kind of life insurance policy for you and your family.
Step 4: A Coke is a Coke, but a 30 year term isn’t always a 30 year term.
OK so this is a weird one, but what we’re trying to bring to your attention is that just because you’ve decided to purchase a particular “type” of life insurance, it doesn’t mean that “who” you decide to purchase that life insurance policy from isn’t also SUPER important!
Once you’ve actually determined the “type” of life insurance policy that is right for you, you need to understand that insurance companies are going to follow a set of “internal” underwriting guidelines that are unique for each company.
That it’s quite possible that the rate class that you qualify for could change dramatically depending on which insurance company you choose to apply for.
For more information on how this is possible, just watch this brief video:
This is why you’ll want to make sure that you’re actually applying for life insurance from an agent who is a “Non Captive” agent, or in other words, an agent that is free to pick and choose who he or she wishes to work with and isn’t bound to just one or two different companies.
Step 5: Why Not Avoid the Drama Whenever Possible?
Now let’s just assume that you’ve decided to follow Steps 1-4 and you’ve now come to the decision that you are looking for about $500,000 in coverage and that a 20 year term is going to be perfect for you.
You’re also pretty sure…
That you in great shape so you’re all set to apply and schedule a date for your medical exam. There’s only one problem, and unfortunately, you have no idea that it actually exists yet.
Even though you firmly believe you’re in great health, and you’re not taking any prescription medications, since it’s been 10 years since you last had a physical, what you don’t know is that you actually have:
Which means that you’re probably going to find out two weeks after you’ve completed your medical exam that you’re either going to need to pay much more for your insurance than you were originally quoted, or you’re actually going to be denied or postpone coverage all together.
To learn more watch this video:
Wouldn’t you have been better…
To have applied for a term life insurance policy that didn’t require a medical exam for approval prior to learning that you actually have high blood pressure and cholesterol levels and might actually be diagnosed with diabetes?
Wouldn’t it have made more sense to apply for a no medical exam life insurance policy first, get insured and then possibly consider applying for coverage with another company if you feel that you could qualify for a better rate somewhere else?
We here at TermLife2GO think so which is why we advise all of our clients to at least consider a no medical exam term or whole life insurance policy first, then if it looks like they’ll be better served by taking a medical exam, we’ll help facilitate that type of life insurance application as well!
This is what having options looks like! This is what it’s like working with TermLife2Go who is dedicated to helping its clients find the best possible deal out there!
So, what are you waiting for? Give us a call today or visit our Life Insurance Quotes page and see what we can do for you!