Through an Agent or Other Financial Advisor
Most people buy life insurance through agents or other financial advisors, and for good reason. Determining how much and what kind of insurance to buy is one of the most important financial decisions you’ll ever make, but it’s also one of the most complicated. A qualified insurance professional will conduct a comprehensive financial needs analysis, and walk you through the multitude of questions you need to consider to determine how much and what kind of insurance is right for you. Of course, the quality of advice you get is dependent on how good your agent is. You’ll obviously want to work with someone who has the right licensing, training and experience. But don’t underestimate the importance of finding someone who’s a good listener. A good agent will take the time to understand your objectives, help you construct a financial gameplan, and then work with you to find the right insurance products for your specific situation. Click here for more information about how to find the right agent.
At the Workplace
Obtaining life insurance through your employer is another option to consider. Your first step should be to make sure you understand how much coverage your employer provides at no cost to you. Many employers provide, at their own expense, a “basic” life insurance benefit, often equal to one to two times your base salary. While this is a nice benefit to have, insurance experts believe that most people need somewhere in the range of 10 to 20 times their net income and sometimes even more than that. Check to see if your employer offers you the option to purchase additional coverage through its group plan. Many employers do. To qualify for additional coverage, you may have to answer a few basic questions about your health. It’s important to keep in mind that if you have group coverage and you leave your job, you generally are not able to take the coverage with you.
If your employer does not provide group life insurance coverage, it may make a life benefit available to you on a voluntary, employee-paid basis. While you pay the full cost of the benefits under a voluntary arrangement, there are several advantages to buying insurance this way. Voluntary plans help workers get coverage more easily than if they were to purchase an individual policy on their own outside of the workplace. Premiums are typically paid through an automatic payroll deduction and can be as much as 10% to 20% less because of efficiencies in enrollment and billing procedures. Additionally, you may be eligible for more coverage under a voluntary plan than is offered by a traditional group plan.
Via the Internet
Like most things nowadays, life insurance can be purchased online. You can get instant quotes, apply for, and even purchase policies. To make sure you get the right amount and type of insurance, the better sites won’t allow you to complete the purchasing process until you’ve spoken with a qualified insurance professional. Some sites work like a brokerage agency. They’ll have contractual relationships with, say, 10 or 20 companies and they’ll broker your case with the company that offers the best product for your specific needs and circumstances. Other insurance e-commerce sites are more like insurance policy marketplaces. They promote the products of a large number of companies and function a lot like a search engine. Their main objective is to take the data you enter into their online quote engine and link you to a company that has a product that’s compatible with your specifications. Some insurance company Web sites also offer the option of buying online, but most will typically try to direct you to an agent who can provide you with personalized service. Keep in mind, most Web sites only offer term insurance, not permanent. Also, if you buy online, the onus is often on you to figure out which policy is right for you. If you’re about to buy a policy but you’re not sure that you’re making the right decision, it’s never a bad idea to run the quotes by an agent in your community. He or she can assess the information you’ve gathered and may even be able to offer you the same types of policies at competitive prices. If not, you can always return to the Internet to complete your purchase and you’ll have the peace of mind of knowing that you’re buying the right product for your specific needs.
Over the Phone or By Mail
Internet purchases of life insurance is one form of direct buying, but certainly not the only one. There are a number of companies that advertise and market almost exclusively via toll-free numbers and/or direct mail solicitations. How might this benefit you? If you want to buy term insurance and you have a good sense of how much coverage you need, you may be able to get the right coverage you need by buying directly. Just be aware of the possible limitations of buying direct. Most direct sellers only offer term insurance, and you generally won’t have the benefit of advice from a qualified insurance professional.