A Step-by-Step Guide on How to Buy Life Insurance
Thinking about buying life insurance? Over half of all Americans already have, according to a 2023 study conducted by LIMRA, a worldwide insurance and financial services research organization, and Life Happens, a life insurance education nonprofit.1 Their reasons for wanting to buy life insurance are probably similar to yours — to help their loved ones pay for your final expenses and replace the lost income, so that they can continue to pay the rent or mortgage and other living expenses after you’re gone.
Amongst those reasons, you’ll notice a central theme: People who buy life insurance want to make life easier for the people they leave behind. In turn, Gerber Life would like to make it easier for you to do precisely that. Read on for a step-by-step guide on how to buy life insurance.
Step 1: Estimate how much life insurance you need.
How much life insurance you need depends on your unique situation. Let’s say, for example, that you have children who depend on your income. You may want to have enough life insurance coverage to help replace that income after you’re gone. If you don’t have dependents, you may simply want to purchase enough coverage to help cover the cost of your funeral and outstanding debts.
Step 2: Research your life insurance options.
There are different types of life insurance policies available for adults, such as term life insurance, whole life insurance and guaranteed life insurance for seniors. There are also whole life insurance policies designed specifically for children.
Your stage in life, not just your age, can help you determine which type of policy is best for you and your loved ones. For example, if you’re seeking life insurance only until your home mortgage is paid off, term life insurance might be the right fit since it provides coverage for a specified period of time, called a “term.” However, if you want lifelong coverage that can see you through from the birth of your baby to retirement and beyond, you may want to consider whole life insurance.
Step 3: Compare life insurance policies.
As with any purchase, you want to make sure that you’re getting the most value for your hard-earned dollar. The best way to do so? Request price quotes and then compare and contrast the policies and what they cover. Always be sure to compare apples to apples, and not just the price. All policies are not created equal, even if they’re both the same type of policy.
Step 4: Research the life insurance company.
Having trouble deciding between similar policies from a couple of life insurance companies? Check their track record. You want your insurance policy, and thus the company you bought it from, to still be around when you need it. To compare insurers, you can use resources such as A.M. Best’s Consumer Insurance Center, which provides impartial ratings of insurance companies based on financial stability, management and integrity.
Step 5: Read the fine print.
Before you sign on the dotted line, make sure to read the fine print. This includes any clauses attached to the policy contract that define how it works and what it will and will not cover.
Not sure what’s covered or need explanations? Don’t be afraid to ask questions, before buying a policy. Your family’s financial future could depend on it.
