The 3 Steps to Buying Life Insurance

June 1, 2023

Life insurance is something to consider as you age, and knowing how to get a policy that will make all the difference is critical. Protecting your family from financial strain in the event of your death is easier than you might think. The right life insurance plan can make all the difference in covering final expenses and sustaining the family financially as they work through the grieving process. For those new to life policies, it can be challenging to determine where to start. Here are the three steps to take. 

Calculate the Life Insurance Coverage You Need

Before purchasing any policy, you need to know how much coverage you need. Consider your family's expenses after your death, including your final services, credit card accounts, and loans. You can also allow a certain amount to replace your income while the family adjusts.

For example, you may want to include five or ten times your annual salary so your family has that income during critical years, especially if you have young children. Finally, consider any trust accounts, college funds, or other dedicated amounts you wish to leave for your loved ones. It helps you decide how much life insurance coverage you need.

Complete the Life Insurance Application Process

Once you have figured out much coverage you need, it is time to complete the policy application. Most companies have similar application steps, including an application, a questionnaire, and a medical evaluation. You will need information about your family and personal medical histories, your occupation, and any high-risk hobbies you may have.

The medical exam is routine, including some bloodwork, assessing your vitals, and reviewing any medical conditions you have. This process helps the company assess the level of risk associated with your life insurance policy based on your current health. Sometimes, this exam happens with a visiting nurse at your home, while other companies ask that you make an appointment with a specific medical office. The agent drafting your application will help you explore your options.

Compare Your Life Insurance Quotes

After the application and medical exam, you receive quotes for the policies you considered. These quotes will detail the terms of the coverage and your annual premiums. Compare the quotes carefully, reviewing exclusions, waiting periods, total premiums, and cash value generation. It helps you choose the policy that fits your needs.

Term policies generate no cash value, but the premium does not change throughout the defined term. At the conclusion of the term, you can either choose another term policy or invest in a whole-life solution instead. Most whole and universal life policies generate cash value, and over time, that cash value may be sufficient to pay the policy premiums for you. Consider your goals and your budget as you compare the quotes.

The process of buying life insurance is more straightforward than you might think. Following these specific guidelines will help you get the life coverage you need for your family. Your insurance carrier can sit down and talk with you about the life insurance options out there for you. 

About 1891 Financial Life

At 1891 Financial Life we don’t just sell policies, we offer possibilities. We pride ourselves on giving back to the communities that we serve by providing quality and comprehensive insurance solutions. We are a not-for-profit life insurance Society, which means the sales from these financial service products help fund member benefits along with social, educational, and volunteer programs designed to respond to community needs.

Our portfolio is extensive, ranging from various life insurance policies to our annuities to support your financial needs no matter what stage of life you’re in.