Life Insurance Coverage

Life insurance professionals generally recommend that you buy at least five times your current annual gross income. Please keep in mind that this is just a general guideline and that everyone’s specific circumstances vary. Before purchasing life insurance, you should carefully consider the following factors:

•    How much yearly income will your family need and for how long?
•    What expenses will your family have to pay for? This could include schooling costs, credit card payments, mortgage, etc.
•    What are the estimated retirement needs of your significant other?
•    How much income and capital appreciation will your current investment portfolio yield?
•    Are there any other special needs that your family might have in the future?

New Life Insurance Policy

Applying for a new life insurance policy is as simple as filling out a quote online. Online quotes can be requested for free and from the comforts of your own home. There are life insurance companies that provide nationwide coverage, and there are companies that specialize in certain states, such as California, New York, etc. When evaluating life insurance companies, you should look for companies with highly trained life insurance agents. You want agents that have the ability and know-how to address each and every customer’s unique needs. Before purchasing a new life insurance policy, make sure that you visit several life insurance company websites and educate yourself on the life insurance in general, planning tools, financial goals, frequently asked questions, and common life insurance terms.

Life Insurance Rates

Every life insurance company uses various risk factors to determine your risk classification. However, the majority of life insurance providers look at the following factors:

•    Your current age
•    Your overall health and lifestyle
•    Your weight relative to your height
•    Your medical history
•    Your family’s medical history
•    Your occupation
•    Whether you have a history of substance abuse (alcohol or drugs)

After carefully evaluating all of your risk factors, a life insurance company will classify you in a certain risk class. These risk classes are generally designated as: 1) Standard Risk, 2) Preferred Risk, and 3) Preferred Plus.

Free Life Insurance Quotes

When you start searching for life insurance policies, make sure that you always get multiple life insurance quotes. With the advent of the Internet, it has never been easier to get several life insurance quotes from the top life insurance companies. To obtain a life insurance quote, you will have to fill out an online form with several fields of information. Once you have finished submitting the form, your information will be passed on to several life insurance companies.

The life insurance companies will then provide you with information on their respective policies and a quote for the policy. With several life insurance quotes, you will have the luxury of comparing prices and policy features. At this point you should decide which policy suits your particular situation the best. With a life insurance policy in hand you will have the comfort of knowing that you made a wise investment decision for your family.

Life Insurance Companies

Life insurance companies vary in size, underwriting policies, and risk tolerance. You need to search for the carrier that fits your specific budget and coverage needs. Life insurance companies all appear very similar on the surface, so you will need to do some research. Companies such as A.M. Best Company, Moody’s Investor Service, and Standard & Poor’s provide ratings and reviews for you.

Highly rated companies generally have stricter underwriting criteria and as such are more risk adverse. They may not underwrite policies for smokers or other high risk individuals. Or if they do, they will increase the premiums accordingly. On the flip side, life insurance companies not rated as high are more apt to underwrite higher risk policies. As such, these companies have more experience in this area and will be better able to tailor their policies to suit your needs. Overall, you should always get multiple quotes from a whole range of life insurance companies.

Term Life Insurance Company

A term life insurance company specializes in underwriting term life insurance policies. Term life policies include level term, decreasing term, annual renewable term, return of premium, etc. Generally, as these companies focus on these kinds of policies they have significant experience in determining their potential risk exposure. With this experience, they are usually able to offer lower premiums than those of general life insurance companies.

Term life policies have coverage periods usually ranging from 10 to 30 years. Before purchasing a policy, make sure that you first do some research on the various term life insurance companies. In addition, make sure that you always compare multiple quotes from these term life companies. Carefully review each term life insurance company’s policy, benefits, rate, and any other pertinent information. If you are uncertain about anything contained in the policy, do not hesitate to ask the term life insurance company directly.

Buying a Term Life Insurance Policy

If you have decided to purchase a term life insurance policy, make sure that you look for a policy that balances the amount of coverage you will require with a low premium. You should also shop around and get multiple quotes from the various life insurance companies. Lastly, you will also need to research the life insurance companies themselves, making sure that they are financially stable and ethical.

Comparing Term Life Insurance and Whole Life Insurance

Whole life insurance is a type of permanent life insurance, providing both a death benefit and cash value component. Upon death of the policy owner, a guaranteed benefit will be paid to the beneficiary(s). Furthermore, the policy owner can borrow against the life insurance policy. However, whole life insurance is significantly more costly than term life policies.

Term life insurance is temporary in nature, and as such is very inexpensive. Term insurance offers coverage periods ranging generally from ten to thirty years. If the policy holder dies during the coverage period, death proceeds are paid out. If not, the policy can be either renewed or you can let it expire.

Financial Strength of Life Insurance Companies

The following companies provide life insurance company ratings: A.M. Best Company, Standard & Poor’s, and Moody’s Investor Service. Each of these companies use different criteria, but you should always look for companies with “very good” or higher ratings. In addition, make sure that the ratings reports are current.

Life Insurance and Family Benefits

Many first time buyers often wonder if life insurance is for them and are not sure how life insurance works. When you purchase a life insurance you are providing security for your family’s future. Hopefully you will not have to use the insurance, but you can sleep soundly knowing that if you do pass away during the policy’s coverage period that death proceeds will be paid to your designated beneficiary. This payment is in the form of an income tax-free single lump-sum payment. These proceeds are often used by family members as an income source, to pay off debts, pay for funeral expenses, pay education costs, alleviate any other financial burdens, etc. With the death benefit your family can maintain their lifestyle, standard of living, and live the way you would want them to.

Smoking and Life Insurance Rates

All things equal, if you smoke cigarettes or other forms of tobacco, your rates will be higher than those for non-smokers. Keep in mind that many life insurance companies will not insure smokers, or if they do will charge significantly higher premiums. However, there are several smaller carriers that do underwrite smoker life insurance policies. The best thing for you to do to get the best life insurance rate is to stop smoking for at least one full ear. The majority of life insurance companies will then classify you as a non-smoker.

Lowering Life Insurance Premiums

There are several things you can do to lower your risk factors:

1) Increase your life expectancy. This can be done through healthier eating and exercise.
2) Stop smoking and drink in moderation.
3) Refrain from engaging in high-risk hobbies or activities.

Life Insurance Medical Examination
The medical examination is usually required when you purchase a certain amount of life insurance. The medical examination involves checking your weight, blood pressure, and may involve a urine or blood sample. The urine or blood sample will be screened and analyzed for cholesterol levels, liver function, nicotine, illegal drugs, etc.

Medical Information and Life Insurance Underwriting

Your medical information is used only for underwriting your life insurance policy. However, sometimes the Medical Information Bureau (MIB) will be used to confirm the accuracy of the information you provided. Your life insurance company must get your written approval before submitting any of your medical records to the MIB.

No Medical Exam Life Insurance Policies

There are no medical exam life insurance policies; however these types of life insurance are limited in the amount of coverage they offer. In addition, rates are generally higher as the life insurance company did not fully assess your risk profile.

Life Insurance Beneficiaries

Life insurance policies require that you designated a beneficiary. You should always name a primary beneficiary, as well as a contingent beneficiary. The contingent beneficiary will receive the death proceeds if you outlive your primary beneficiary. Without a contingent beneficiary, the proceeds would be paid directly to your estate. If paid to your estate, the proceeds will have to go through the regular probate process, as opposed to being paid directly to your beneficiary.

Changing Life Insurance Beneficiaries

The policy owner can change the beneficiary at his/her discretion, unless the beneficiary has been designated as irrevocable. Changing the beneficiary simply requires the policy owner to fill out a form, having it properly witnessed, and submitting it to the life insurance company. People often change beneficiaries in the event of a divorce or with the birth of children. It is not hard to switch beneficiaries; however you need to remember to do it.

Life Insurance Over 50
As people get older their need for life insurance also decreases. However, with life expectancies continually increasing, people in their 50’s should still definitely consider purchasing a life insurance policy. There are many life insurance products that are specifically tailored for those over 50 years of age.

Senior Life Insurance
Purchasing senior life insurance really depends on your particular circumstances, but generally the need for life insurance declines as we age. However, if you have a large estate, or have your own business, or still have loved ones who rely on you, then you should definitely consider purchasing senior term life insurance. Senior life insurance is typically more costly as the life insurance provider’s risk exposure is greater.

Free Examination Period

The “free look” period refers to the right of the insured to examine an insurance policy for a period of 10 days or more. The period granted varies from State to State. If the insured is not satisfied with the policy, he or she can return it the life insurance provider for a complete refund.

Collecting Death Benefits

Beneficiaries can collect death benefits anytime after the insured has passed away. Most life insurance companies recommend that beneficiaries do not make financial decisions with the benefits until they have had enough time to deal with the loss of their loved one.

Keep in mind, that most life insurance companies keep the death benefits in a special account earning interest until claimed. This will give the beneficiary(s) the peace of mind that the proceeds are secure and are being managed responsibly.

Life Insurance and Life Expectancy

Obtaining life insurance is becoming more and more important as life expectancy for Americans continue to rise. Currently, life expectancy in the U.S. is 77.8 years. With a multitude of life insurance products, you are bound to find one that fits both your current and future needs.

Life Insurance Policies and Income

When searching for a life insurance policy, you need to consider your current income level. Generally, you should purchase a policy that at a minimum covers 5x your annual gross income. This buffer should provide for your family’s living expenses and any other miscellaneous costs that might arise.

Get a free life insurance quote.

*LifeQuoteReview.com is not a life insurance company and cannot issue life insurance policies. In addition, we are not associated with the life insurance companies that are profiled and LifeQuoteReview.com makes no representation, express or implied, that you will receive a quote from any specific life insurance company.