6 Best Strategies When Shopping for Life Insurance

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Shopping for life insurance can be grueling at times. Choosing the most suitable one can be confusing, especially if there are so many options in the market. Some people are confused about how much and what type of life insurance to purchase. And sometimes, people second guess if it’s even necessary to obtain life insurance at all.

This article will go through the best strategies for finding the most suitable life insurance policy for your budget and needs.


What You Should Consider When Shopping for Life Insurance

Define Your Needs

The objective of purchasing life insurance is to leave financial resources for beneficiaries or services after you die. Payments to the insurance company for premiums go toward the death benefit, the financial payout after your death. Some people wish to use this payout for specific purposes.

Life insurance is beneficial, but it is not required for everyone. If any of these conditions apply to you, you might consider getting a policy:

  • Your loved ones depend financially on you – plus, they will require financial resources after your death.
  • You wish to cover your business’s payroll and other operational costs in case of your passing.
  • You wish to diversify your investment. The cash value component of permanent life insurance contracts grows tax-free. The sum is usually at a fixed or money-market rate, which provides a highly conservative return.
  • You need the payout to cover your funeral and burial expenses.


If you know exactly what you want to achieve and why you need life insurance, you can cut through the confusion of what life insurance type to buy.


Assess Your Financial Situation

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Regardless of the purposes, you must clearly understand your financial situation before determining the type of life insurance you require. Consider what you already have, including an emergency fund, retirement savings, and any life insurance coverage provided by your employer. This step will help determine how much the annual premiums you can afford.

Then, check if you can afford premiums for whole-life or term-life insurance. Term life insurance provides coverage for a certain length of time, while whole-life policies provide lifelong protection as long as you keep up with the premium payments. Whole-life insurance appears to be more expensive due to its features and policies.


Determine What Type of Life Insurance You Need

Life insurance is classified into various types. Each of them has fundamental differences, including advantages and disadvantages. Consider their distinctions might benefit you in making final decisions.

  • Term life insurance provides death protection for a specified period or term. Its policies offer lower premium costs than other types but include an expiration date. So, you’ll almost certainly have to re-qualify for a new period. Furthermore, the premiums on renewed policies are more expensive as you age.
  • Whole life insurance refers to permanent coverage. You will be covered for your entire life if you pay your premiums. In addition to guaranteed death benefits and lifelong coverage, you will receive a cash value that you can withdraw or borrow during the term. Despite its benefits, whole life insurance is costly.
  • Universal life insurance is identical to whole life insurance; the only difference is that its policyholder can change the premium amount at any time.
  • Variable life insurance is also a type of permanent coverage. Cash value investing in variable mutual funds or sub-accounts could be a great strategy to build wealth. Beneficiaries can get tax-free death benefits upon your death. However, you may face death benefit depletion if you borrow or withdraw against the policy’s cash value.
  • Final expense life insurance is a permanent type that provides a restricted death payment. The coverage is designed to cover end-of-life expenses for the elderly and retirees and persons with serious health issues.


Related: What Are The Different Types Of Life Insurance? 


Compare Life Insurance Companies


Because life insurance policies among companies are highly competitive, quotes can vary dramatically between companies. It’s a good idea to consider companies offering coverage that meets your budget and objectives. If you decide to work directly with an agent, make sure they are aware of your financial circumstances and take the time to explain options in an accessible way.

According to Investopedia, here is the list of the best life insurance companies in 2022:

  •  Best overall: Nationwide
  •  Runner-up, the best overall: MassMutual
  •  Best user experience: Haven Life
  •  Best for term life insurance: Protective
  •  Tied for the cheapest term: Banner
  •  Best for living benefits: Mutual of Omaha
  •  Most universal life options: Lincoln Financial
  •  Best for policy customization: Transamerica
  •  Best educational resources: Prudential Life Insurance
  •  Best for seniors: New York Life


Don’t Lie to Your Insurance Company

Take care not to disguise any facts on your life insurance application. It is critical to be genuine because insurance companies employ third-party sources to confirm the information you supply. The insurance provider can learn more about you by reviewing your medical data, prescription drug history, driving record, and public records.

Lying might result in denied applications, increased premiums, or denied claims. In addition, if the insurer can prove you lied on purpose, you could face charges of life insurance fraud.


Understand Thoroughly Factors That Affect Your Rate

Health and age are the two most important factors that insurance companies use to decide your premiums. Because young people are more likely to be healthier, the younger you are, the less expensive your life insurance will be.

As part of the application procedure, you may be required to undergo a health examination. Depending on the medical exam information, you may have to pay more if you have specific medical problems. But if your health issues are controllable, they can assist you in managing your premiums.

The rate is also determined by the insurance type and the size of the death benefit. Additionally, if you get term life insurance, the length of the term you select will also affect your premium.


If you have any questions about shopping for life insurance, please get in touch with us to receive a free consultation. 


Quotetopia matches you with what you’re looking for! We make your search a single step based on coverage and cost information from hundreds of top insurers, connecting you with the best match at the best value. From auto to health to life insurance, Quotetopia has you covered. 

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