Steps for Buying Life Insurance

The abundance and complexity of policy options can make choosing life insurance coverage a challenging task. When faced with the need to purchase a policy, most consumers don't even know where to begin. Commonly, the consequences of walking into the process unprepared are poor coverage decisions. Once you have made the decision to buy life insurance, the following are the steps in which you should take.

1. Determine your coverage needs Most financial planners recommend that you purchase a policy that is five to seven times the amount of your annual salary. For those with small children or considerable debt, the appropriate amount of coverage might be as much as ten times your salary. When determining your needs, also remember to allow for major future expenses, such as college tuition, retirement, and so on.
2. Figure out what will fit into your budget. What level of premiums you can afford will impact your policy decisions, so make sure you review your budget before shopping for coverage.
3. If you are young and healthy, choose term life. If you want the most affordable and practical option, go with term life insurance as long as you're under the age of 50. Term life will not accrue cash value, but you can invest the money you save on premiums and build wealth the same way you would with a whole life policy.
4. Shop for quotes online. To get quick pricing estimates, apply for life insurance quotes online. The quotes you receive will only be approximations, but they are a good starting point.
5. Get in shape. Before you take your life insurance medical exam, you will want to make sure you're in the best health possible. If you smoke, are overweight, or have high blood pressure or cholesterol, you need to make changes in order to qualify for affordable rates. Losing weight, reducing your drinking, and quitting smoking can help you save thousands of dollars on premiums over time. You may also consider getting a medical exam of your own beforehand to avoid any surprises during the real thing.
6. Decide how to purchase coverage. Consumers can purchase life insurance through several avenues. You can purchase directly from the insurer, through an insurance agent, through a broker, or from a financial planner.
7. Understand the commission incentive. It is in the best interest of insurance agents, brokers, and commission-only financial planners to sell you the maximum amount of products at the maximum price. As such, you will need to have your coverage decisions firmly made prior to walking into their offices to avoid getting high-pressured into unnecessary extras. If you would like to avoid having to pay commission altogether, you should go with the direct-purchase option with the insurer of your choice.