Are you getting ready to shop for life insurance online? If so, be aware that the process is quite different from speaking with an agent in person. In many ways, it’s a lot easier to use online buying as a way to screen companies and come up with a short list of two or three candidates. In addition to basing your decision on the carrier’s reputation in the industry, be sure to find out if the policy you get has a cash surrender value. Then, test your short-list companies by calling them and seeing how responsive they are to general questions. Don’t buy too much or too little coverage, and spend at least one hour reading about the basics of how life insurance works before you start your quest. Here are details about the tips.
Use Reputable Carriers
Remember that your policy is as good as the company that sells it to you. That’s why millions of consumers wouldn’t buy from a low rated carrier. It’s easy to look up a company’s rating online because the industry is meticulous about publishing ratings. Besides, the better carriers willingly list their ratings on their main websites.
Inquire About Cash Surrender Value
Some people decide to surrender their policies in exchange for cash. They do this for all sorts of reasons. The main point for online shoppers is to find out how your prospective carriers determine that value. You might have to call the companies and ask. Either way, be certain to inquire about it. Fortunately, there is a comprehensive guide you can look through and find out how to know the cash surrender value of any coverage you buy. In its most basic form, cash surrender value is one way of getting money for a policy without having to sell it to a third party.
Get the Right Amount of Coverage
It’s crucial not to purchase more insurance than you need or less than you need. There are dozens of formulas for figuring out what the right dollar amount is based on factors like lifestyle, age, gender, marital status, whether you have children, and your annual earnings. One of the standard formulas for estimating how much coverage you need uses the number of years before you expect to retire and multiply that amount by your current annual income. So, if you earn $50,000 per year and will be retiring in 25 years, $1.25 million is a reasonable ballpark estimate of how much your policy’s benefit amount should be.
Learn the Basics Before Shopping
There’s no need to spend hours of time researching the subject. But, it’s wise to read several articles that explain the main kinds of coverage, what each one offers, who needs each type, and so forth. This is also one of the ways to save money in the long run. Make sure you understand the difference between term and whole policies, which are the two major variations. At the minimum, your reading should inform you about the types of coverage, how to figure out how much you need to buy, how to find a reliable company, how to find company ratings online, and what the average premiums are for people of your gender and age.