Hundreds of life insurance companies do business in the United States. So, how do you pick the best life insurance company?
This decision requires the company to understand your needs and a solid understanding of what carrier will provide you with the greatest value. The combination of the two allows us to provide affordable life insurance rates for your family. We take pride in finding the best company and policy for each of our client’s needs.
One common question people have is, how do they buy life insurance from one of the best life insurance companies? While a seemingly simple question, it still requires a combination of knowledge and thought. There are a wide variety of life insurance coverage options available, and can sometimes feel overwhelming and confusing—allowing you to become distracted and lose track of the coverage that you actually need.
Asking five simple questions while you are shopping for one of the best life insurance companies can make the process a lot easier.
Question 1: Why do I need life insurance?
The majority of families now depend on your income. If you are in this category, you may be wondering how your family would survive financially if you passed away unexpectedly. This question is answered through a life insurance policy from a reliable company.
Life insurance can’t be measured in the same capacity as your home or car—you can’t measure it in dollars. However, you can look at the financial implications that would impact your family if you passed away.
For example, shoppers with young families may be looking for the best life insurance company to provide coverage for replacing the money previously saved for college tuition, repaying existing debt, or even providing security for your stay-at-home partner.
Life insurance isn’t only used for replacing lost income, and it is necessary even if you aren’t your family’s primary income generator. For example, life insurance could help your partner who works with daycare or other duties that you currently handle, cover final burial expenses, fund a scholarship, or even serve as collateral on a business loan.
Identifying why you specifically need life insurance coverage will help you determine the amount of coverage you should buy.
Question 2: How much life insurance coverage do I need?
This can be a tricky question because as we know, you can’t predict the future. However, you can identify a reasonable estimate based on how much money you make, how much you spend, and how much you currently have in your savings account. When you are considering the amount of coverage, it should replace your income for seven to 10 years.
You need more coverage.
There are some caveats to this seven to 10 rule. You may need more life insurance coverage if you are expecting to make significantly more money in five years, you have more children to put through college, an increased amount of debt, loved ones with special needs who may require a caregiver or other unique financial demands.
You need less coverage.
It’s also important to note that some individuals require less than the traditional amount of life insurance coverage because each situation is unique. Individuals who depend more on investments versus income for living expenses, children are/will be financially dependent soon, home paid off, small debts, or you have already saved enough money for your family to live comfortably with your income for 7-10 years won’t necessarily require max coverage.
You need coverage for a specific purpose.
Life insurance can also cover you when you have a specific reason, so estimating your coverage may require less time. For example, you may need it for the requirements of a business loan, burial insurance, to pay off your home, or even to pay estate taxes. For these types of specific purposes, you may need significantly less coverage or substantially more depending on your situation. Working with one of the best life insurance companies can help ease this process and make sure you aren’t investing in coverage that won’t be beneficial for you.
Question 3: How do I determine what kind of life insurance I need?
Life insurance can be generally divided into two types. Temporary life insurance which is commonly known as term life insurance. Or, permanent life insurance, commonly known as whole life insurance.
Term Life Insurance
Term life insurance is when you have coverage for a specific period of time from 10, 15, 20, or even 30 years. During that time, you pay a set premium, and after the period ends, your coverage expires. You do have the option to renew the same coverage amount, but it will be at a much higher price, or you may have the option of converting your policy into a whole life policy. Term life insurance isn’t a bad option at all; it depends on a number of factors such as your overall situation, income, age of your family members, etc.
Whole life insurance
Whole life insurance lasts your entire life and costs more than term life insurance. Whole life insurance also has lower caps on coverage. In addition, whole life insurance gains cash value over time. You can use the cash value as it accrues in different ways, and this helps determine the type of whole life insurance you choose.
While there are other distinctions that can make a big difference in your type of life insurance (e.g., medical exam policies versus no medical exam), all insurance is categorized as either term or whole.
Question 4: How much will my coverage cost?
Your coverage cost will be impacted by the courage amount and the type of policy. The factors that were discussed in questions 1-3 will affect the price you pay for life insurance. If you want additional features added to your policy, then that will also raise your premium (the price you pay).
Question 5: Where should I buy coverage?
You should consider life insurance from some of the best life insurance companies. However, the kind and amount of insurance that you need will influence your decision as to where you buy coverage. A great place to start is to just enter in your information into our comparison of life insurance quotes and begin comparing coverage. If you are young, healthy, and need a sizeable coverage amount to protect you and your loved ones, you won’t have difficulty finding coverage. The advantage of working with an independent agent is that we are able to search through all the insurance companies that provide life insurance in your area. This allows you to take advantage of the best policy and customer service—because we aren’t working for only one company or a limited number of companies. We work to find you the best rate, while other companies may be working to get you tied into one place.
What does this all mean?
The best life insurance companies are out there. The best life insurance company will be one that is willing to work with you and meet your needs. However, you still need to have an accurate picture of what you want in order to make sure that their expertise matches your desired outcome. This will also help you cut through the confusion life insurance shoppers frequently experience. Take into consideration these questions, your risk factors, and the impact of your health will give you a reasonable and realistic idea of your life insurance premium. Lastly, take control of the process and make the best decision for your family.