How To Buy Life Insurance - The Easy Way
Life insurance is a critical component of financial security that nobody wants to handle. It's confusing, boring, and depressing. Here's how to buy life insurance as easily as possible.
Did you just get married? Or have a new baby? If so, that means it’s time to buy life insurance! Or, if you’ve already got life insurance, a new family member means it’s time to review your coverage and determine whether you need to buy more.

Life insurance is a critical component of financial security that nobody wants to handle. It’s confusing, boring, and depressing. And let’s not forget the little tickle in the back of your mind that wonders if your spouse will kill you for the payout – the result, no doubt, of watching one too many episodes of Dateline.

But as soon as somebody relies on you for financial support (perhaps a spouse, but definitely a child), you should have life insurance.

It’s best not to wait: life insurance is far less expensive when you’re young and healthy.

How to buy life insurance

There are three basic ways to buy life insurance:

  1. Directly from an insurance company,
  2. through an independent local insurance agent, or
  3. via an independent online broker.

First, it’s important to stress that you should always buy life insurance from an independent broker – whether local or online. Agents who work for a single insurance carrier, such as MetLife or John Hancock, will be eager to sell you a policy. Nothing against those companies, both are large, reputable insurers. However, life insurance pricing is incredibly complicated. If you don’t shop around, it’s almost guaranteed that you’ll pay more than you need to.

If you work with an independent insurance agent you trust, he or she may be your first stop to discuss life insurance, and that’s fine. Just know that your agent may present you with different types of life insurance and the choices may be overwhelming. I found it was easier to ascertain that I wanted level term insurance first before going shopping.

Once you know what kind of life insurance you want to buy, comparing policies gets a bit easier, but there are still a number of variables. That’s where the internet comes in handy, which we’ll get to in a moment.

What kind of life insurance to buy

Term life insurance is the only kind you should consider.

Term life insurance is cheaper and – for 99% of people – term life is the best financial decision when buying life insurance.

The insurance industry earns big profits – and their agents big commissions – from products known as whole life insurance, universal life insurance, or cash-value life insurance. But for most people, anything other than term life insurance is a bad deal.

Term life insurance is easy to understand because it works just like your car or app德扑圈官方网址homeowner’s insurance. For every year you pay your term life premium, you’re covered. If you die within the covered period, the policy pays a death benefit. When the policy expires or you stop paying your premium, the coverage ends.

Term life insurance is also relatively cheap. For example, a healthy 20-something might be able to buy a $1 million 20-year term life insurance policy for $500 a year. A smaller policy – say $250,000 – might cost just $15 or $20 a month.

Where to get online life insurance quotes

Policygenius Logo - Policygenius

We recommend Policygenius because they provide more accurate quotes, let you complete more of your application online, and won’t harass you with telemarketing calls.

As insurance industry veterans, Policygenius designed their site to address the most inefficient and inconvenient aspects of buying life insurance.

Policygenius provides a thorough, yet easy, online form that returns term life insurance quotes. The price quotes you got online from most sites, in seconds, are rough estimates at best. According to Policygenius, however, 92% of their estimates are within $10 of a user’s actual yearly payment!

Better yet, Policygenius will only call you if you want to be called. Life insurance salespeople have a reputation for being aggressive with a capital A. As a result, after you request a quote from some other websites, they will call you multiple times a day for weeks.

I know because I tried it! Trust me, Policygenius provides a more pleasant experience; you can read more about Policygenius in our full review.

Information you need to get your quote

You won’t need any specific documents to get a life insurance quote, but you should be familiar with your medical history and the results of your most recent physical exam.

Here are the rough steps involved in comparison shopping for life insurance:

You’ll complete a brief form about you

Gender, age, weight, and whether you smoke are all questions you should be prepared to answer. Smoking is the biggest factor in pricing life insurance. Prepare to pay double if you smoke.

Most sites will require an email address and phone number before spitting back some quotes. But, again, not Policygenius.

If you want to compare life insurance quotes, the broker will ask a lot of personal medical questions, which is unfortunately necessary to provide accurate estimates. Be honest, as much of this information will be verified with your medical record or during a medical exam when you apply for insurance.

Select how much insurance you need (and for how long)

You need life insurance to replace your income in the event of your death, in order to provide for your family. It’s common to buy enough life insurance to replace your after-tax income until your children turn 18, plus an additional amount to cover education expenses or debts.

Common terms are 10, 20, and 30 years. If you’re not sure, use our easy life insurance calculator to find out how much life insurance you should buy.

You may be surprised to see a wide range of prices from different insurers

But without a more detailed application, most of these numbers are just guesses. Insurance companies employ actuaries who do nothing but crunch numbers to determine how to price insurance. The more information you provide upfront, the more accurate your quotes will be.

Learn your class: preferred, super-preferred, standard, or substandard

The insurance industry uses these broad groups to classify customers by risk. For example, if you are perfectly healthy, have a low body mass index (BMI), and do not have other risk factors (like smoking, dangerous activities, or a lousy driving record), you may meet the super-preferred class. By contrast, somebody who is overweight and has high blood pressure may only classify for the standard class and will pay more for the same insurance.

Although life insurance classes can provide broad guidelines of what you can expect to pay, every insurer works differently. For example, let’s say you have a hobby that insurance companies consider high risk – like flying a plane or rock climbing. Some insurance companies may place you in a lower class and charge you more for these “high-risk” activities. Another insurance company may insure you in a higher class, but place exclusions on your policy meaning you won’t receive a benefit if you die as a result of those activities.

Compare quotes from over a dozen insurance carriers

(UPDATE) First Time Car Buying Guide - Policygenius
Find the best life insurance rates with Policygenius. Start now!

How to apply for a life insurance policy

After you’ve found your best quote, you’ll need to apply for the life insurance policy – this process can take several weeks.

The process of applying for life insurance can involve even more extremely personal questions, paperwork, and a medical exam.

Policygenius helps you get started, but you still have to buy insurance from an insurance company, most of which are still living in the pre-digital era. So, you can’t really buy life insurance entirely online.

Here’s what happens after you apply:

Verify your application

First, you’ll need to speak with an agent on the phone who will verify some of the information you provided online and confirm that the quote you selected is the best policy for you. The agent will then provide some paperwork for you to sign and submit your application to the insurer.

Schedule your medical exam

If the insurance company requires a medical exam (and most do), a contractor known as a paramedical professional will contact you to schedule the exam. The paramedical professional is trained like a nurse in performing a physical exam.

Policygenius, however, has partnered with Brighthouse SimplySelect℠ to offer term life insurance with no medical exam or lab work required! All you have to do is answer a few questions and talk with a Policygenius agent over the phone.

This significantly speeds up the underwriting process, so you can get life insurance in as little as three of four days, rather than a few weeks or months. And what’s even better is this doesn’t raise the premiums that typically come with no-medical exam policies.

Complete your exam, then wait!

The examiner will take a thorough medical history to confirm the info in your application. He or she will take your blood pressure and draw a blood sample that will be sent to a lab to test for cholesterol and glucose levels, tobacco and drug use, and diseases. These results will be shared with you by mail.

In life insurance applications, honesty is paramount: don’t be surprised if you must answer the same question about your medical history or tobacco use five times, but always answer honestly. Insurance companies share information, so misrepresenting information might not just get you denied from one carrier, but banned from many. Worse, it could give the insurer legal grounds to deny your family’s claim if you die.

The insurance underwriter’s job is to take all the information from your application and medical exam and decide whether to insure you and how much to charge. This takes many weeks. You’ll want to ask your agent whether the carrier binds any life insurance upon receipt of the application. For example, when you submit your application and a check for your first premium, many carriers will insure you for something, although not the full amount you’re requesting, pending completion of the underwriting process.

What to expect after you apply

When your policy is approved, it is placed in force and you will be notified, and receive a full copy of the policy.

If you didn’t already provide your agent with a deposit, you’ll be asked to make the first premium payment.

Some insurers may allow you to make your first payment to bind your policy upon submission of your application (prior to your medical exam). The insurer reserves the right to cancel the policy or increase your premium if your exam reveals previously undisclosed medical conditions, however.

Either way, be sure to ask when your policy will be effective – especially if you’re replacing an existing policy. Don’t cancel the old life insurance before you’re sure the new policy is in effect!

The agent will send you a hard copy of the policy. You should make a copy of this policy, place the original and the copy in different spots for safekeeping, and tell your spouse where they are. Finally, you can relax knowing that one of the most important pieces a solid financial plan is in place for you and your family.

That’s it! Although it seems like a lot, the process of buying life insurance can be easier than you think. Scheduling the medical exam and waiting on the results are the only real hassle.

Take action: Visit Policygenius to get a free, no-obligation life insurance quote.

Summary

Buying life insurance doesn’t have to be difficult anymore. Know that you’ll likely want term life insurance, not whole life insurance. And when looking for life insurance, aggregators like Policygenius can help you get quotes for term life in just minutes.

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About the

Total Articles: 352
David Weliver is the founder of Money Under 30. He's a cited ity on personal finance and the unique money issues he faced during his first two decades as an adult. He lives in Maine with his wife and two children.

Article comments

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16 comments
JEROME BALDONADO says:

Just a radical counter thought process here. I can’t understand why in this age where people are living healthier and longer is anyone thinking that a term life insurance is cheaper!!! Industry experts quote that less than 1% of term insurance payout death benefits. That is the reason they are cheap because it is free money for insurance companies. They know the odds.Where is the value of spending all those money knowing statistically that you wont use it. Its like buying medicine which will not cure you anyway. Now if you subscribe to the “buy term invest the difference” philosophy. where again is the evidence. industry experts state that 1/2% of people who buy term do invest the difference. I think our decisions and advice should be based on evidence and results and not on theory. An obese persons knows that he needs to undergo weight loss for health reasons. All the theory that he reads won’t help. The advice that he should follow is what works for him. Not buying term and taking good care of yourself sounds a cheaper alternative – riskier but definitely cheaper. If you are risk averse buying whole life I think is better because the risks you are mitigating is life long not for a limited time. but that is another topic.

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Chris Acker, CLU, ChFC says:

Thanks for making the “younger crowd” aware of the importance of life insurance.

According to LIMRA statistics in their annual Barometer Study, most consumers still overestimate how much it costs to buy life insurance. When you’re in your 30’s IT”S SIMPLY NOT EXPENSIVE to buy good term life insurance. I always tell clients to get cheap term insurance and lot’s of it. I would rather see young folks pay for term insurance in the proper amount and not use it, than to wait too long until they are not healthy enough to get good rates.

Thanks for this piece!

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business listings | weathify says:

Is there any average as to what one “under 30” can expect to pay? Obviously there are many factors at play, but I got one quote from my insurance guy today that I thought was particularly high.

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Steve says:

I recommend term life insurance to just about everyone I know. I’ve heard quite a few horror stories about whole life insurance. Plus, it’s so inexpensive that you can’t really go wrong. Many people can afford a couple of hundred bucks a year to insure their life and protect their family should they pass.

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Earnest Watkins says:

it’s good to know that term life insurance is the cheaper type of insurance. I’ve been interested in getting life insurance, but I don’t want to spend a ton. I’ll likely consolidate my searching to term life insurance then if it is going to be easier on my budget.

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Vivian Black says:

It’s interesting to learn beforehand that life insurance would require a medical exam before entertaining my application as you’ve mentioned. That is perfect to learn as I was just planning to have mine applied later. It seems like I would need to look into which day would be best for my medical exam first. Thanks for the heads-up on how to buy a life insurance online!

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Brett says:

For all you young professionals out there… try to be forward thinking regarding this matter. Most of you will have a family someday, and this will be something you procrastinate until perhaps baby #1 pops out.

I’ve lost 7 cases in the last 6 weeks because clients were uninsurable. They didn’t think it was something necessary to worry about until down the road (maybe because that’s what someone told them or what they read online), and now they have health issues. I understand its hard to commit to the concept of spending more money on INSURANCE, but do understand how easy it is for these companies to say Thanks but No Thanks for your business.

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ash says:

This free quote section you have at the bottom of your article gave out my address and phone number which I am now receiving non stop calls. I am a big fan of this website and appreciate this article but I don’t appreciate that at all.

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Joel says:

Life insurance and investing in regards to planning for my future have always kind of been at odds with one another… On one hand, I’m paving very carefully plans for my future and on the other hand, I’m planning for a future without me in it. Sad and depressing but I suppose I’ll have to reconcile because it does make sense to get life insurance.

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Adam Foley says:

It’s so easy to talk yourself out of being able to afford life insurance, but the alternative is possible poverty for survivors in your family. We finally bit the bullet after we had our 3rd child, and bought a 20 year term policy (that is convertible, but we probably won’t opt for whole life insurance yet). For $133 a month my wife and I are covered for one million dollars (me $750k, her $250k because she works part time and my income is 3/4 of our total income). My best advice for people is to purchase it while you are young and healthy, and lock in a nice, low rate.

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Jonathan says:

I think term life insurance is a good place to start; but for me personally it was not worth keeping. I started out with a 10-year term life insurance when I was 22, as I was taking out private student loans co-signed by my parents. By the 5th year, I realized 10 years was not nearly long enough for life insurance, since it will be 15 more years before I will have my student loans paid off. I had it converted to variable universal life insurance. Yes, it’s costing me over 3x more per month, but now I have a life insurance policy that will build cash value. And since I was converted from my term life insurance, I was rated at my age and health when I was 22.

The biggest reason I had my life insurance converted was so that I could cancel when I felt comfortable doing so. I’m not sure if I will have a family or not. I don’t plan to do so, but if I do, the life insurance is there. I have a disabled brother. If I believe he will be OK when I pass away, I can cancel the life insurance. The benefit over term is (for my policy, at least) after the 12th year, I am entitled to a portion of my premiums. If I remember correctly, it varies for variable universal life, and 100% for whole life insurance, but whole life costs 2x more.

My recommendation would be to get a term life insurance policy NOW, but with a reputable insurance company who will allow you to convert your policy if you decide to do so in the future. I’m glad I did!

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Dave E says:

Is there any average as to what one “under 30” can expect to pay? Obviously there are many factors at play, but I got one quote from my insurance guy today that I thought was particularly high.

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Mark says:

I got a 30 year $400,000 policy for $324/yr, I was 25.

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Suzanne says:

I got a $750k policy when I was 25 for $468/year. My husband, who is 30 and a smoker, pays $750/year for a $250k policy.

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J Larsen says:

Hi there. I get regular feeds on life insurance posts (financial advisor) i was reading your blog or article on life insurance (congrats on the new addition btw) what was a little disturbing was the advice you are giving.what is great is that you are telling your readers to get insurance or look into it. But to reccomend term insurance as the best option due to cost is misleading and if you look at actaul cost of insurance over tiime….wrong. What disturbed me was in your example the life insurance agents role seemed only to be what companny to pick? What about the actual analysis …needs analysis as to what you actually would need to cover …not just debt but income replacement. If you had done one you would have had a discussion about critical illness insurance as well which statistically has a far greater likelihood of occurring. So my message is CAUTION….in giving financial security advice price is not always the main event. Happy 2013!

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David E. Weliver says:

J, thanks for reading and your input. My argument for term life insurance isn’t solely because it’s cheaper but because steady self-directed long-term investing results in greater wealth in the long run than buying permanent insurance. I would rather counsel a young reader with 30-40 years ahead to invest (the audience here) to spend a little bit on term insurance and get into the lifelong habit of investing than buy an expensive permanent policy. There are volumes of arguments for this approach from objective sources (i.e., not compensated by selling financial products like insurance policies). Here is one from the Wall Street Journal.

We have an additional discussion of permanent versus term and “invest the difference” here, where commenters from both sides weigh in.

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