Buying Life Insurance A Shopping Checklist


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When shopping for term life insurance, you want to find the right amount of insurance coverage at
a reasonable price with a company you can trust. But for many people, getting started is the
hardest part. That's where the following Life Insurance Checklist can help.

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Buying Life Insurance A Shopping Checklist

  1. 1. ==== ====Learn about life insurance ====When shopping for term life insurance, you want to find the right amount of insurance coverage ata reasonable price with a company you can trust. But for many people, getting started is thehardest part. Thats where the following Life Insurance Checklist can help.1. What you would like your policy to achieve?Ask yourself what it is you want your life insurance to do. For example, do you want to haveinsurance coverage that will:oPay funeral arrangements?oPay the outstanding balance owing on a mortgage and other debts?oOffset the loss of your income? And if so, for how long?oContribute to the future education of your children?oA combination of all or part of the above?Knowing what you would like to accomplish with your life insurance policy and approximately howmuch you need to achieve these goals will help you determine how much life insurance youshould consider purchasing. Online life insurance calculators are available to help you put a dollarvalue on the amount of coverage you need.2. Who would you like to insure under the life insurance policy?Most insurance companies offer a variety of life insurance products to suit your lifestyle and familyneeds. You can get an insurance policy on your own life, or you can get one policy for both youand your spouse (called a joint life insurance policy). The most common joint life policy providescoverage when the first partner dies, leaving the life insurance benefit to the surviving spouse.3. How long will you need life insurance?Consulting a psychic isnt necessary, although it does require that you estimate the timing of yourlife insurance needs. For example:oWhen will your mortgage be paid off? The amortization period of your mortgage will oftendetermine how long your term life insurance policy should be.
  2. 2. oWhen will your children be finished school? One day theyll finish their education and havingenough life insurance coverage to pay their educational expenses wont be necessary.oWhen are you planning to retire? You will have less income to replace at that time.Knowing how long youll need life insurance coverage before you begin shopping will ensureyoure comfortable with the life insurance product you end up purchasing. Online tools areavailable to help you figure out which term for your life insurance policy is most recommended forpeople with similar lifestyles.So now that youve got the how much, who and how long questions answered, youre ready toshop.1. Compare life insurance quotes from multiple companies:It pays to shop around because life insurance rates can vary considerably depending on theproduct you choose, your age, and the amount of coverage you request. This is the easy part,because with the Internet you can compare life insurance quotes easily, online, anytime.2. Which life insurance rate has been quoted - standard or preferred?There are two basic life insurance rate groups you should know about when shopping for lifeinsurance coverage: standard rates and preferred. Standard life insurance rates are the rates themajority of Canadians qualify for, while about one third of the population is eligible for preferredrates.Preferred life insurance rates are typically offered to very healthy people and means you may paya smaller premium than most. Usually preferred rates are offered only once the results of themedical information and tests are known. It will depend on your blood pressure, cholesterol levels,height, weight, and family health history. But preferred rates are worth it. They could save you upto 30-35% off your quoted premium.When comparing prices, make sure youre comparing standard to standard or preferred topreferred life insurance rates. If youre not sure, ask the broker. It would be disappointing to findout you were quoted preferred rates at the beginning, only to find out you dont qualify for themlater.3. Review the life insurance brokers availability:How easily can you get a hold of the broker? What are their hours of operation? Whether it isthrough their website or telephone, the life insurance broker should be easily accessible to youshould you ever have questions or need to speak to them about a change in your life insuranceneeds. Look for toll-free numbers and extended hours of service as guides.4. Review the medical information required to obtain the policy:Typically the more medical information you provide, the better the price. For a policy that asks fewor no medical questions, you can bet the premium is higher for the same coverage then a plan
  3. 3. asking for more information. Depending on the company, your age, and the amount of coverageyou want, you could be asked to provide blood and urine samples. To obtain the samples, a nursewill visit at not cost to you.5. Consider a life insurers financial stability and strength:A companys financial stability is something to consider if you are planning on making a long-termpurchase like life insurance. There are organizations out there, like A.M. Best, that evaluateinsurers and provide a rating on their stability and strength.6. Ask about renewal options and requirements:Once the initial premium is set, it is usually guaranteed for the length of the policy (often 10 or 20years). But what happens when the policy expires? Most policies are renewable until you are 70 or75 so dont forget to ask your broker if you will have to take a medical to renew your policy. Whileyour premiums will be higher on renewal, find out if they will also be guaranteed to remain level forthe second term of the policy.7. Confirm the policy can be cancelled without penalty:Most term life insurance policies can be cancelled at any time without penalty. Make sure to checkwith your broker to see if the life insurance company has any unusual cancellation policies.8. Consider the conversion options and restrictions for the policy:As your life changes so do your life insurance needs and you may want the option to convert yourcoverage some day.To convert a term life insurance policy means to transfer all, or part of, the death benefit of thepolicy into a permanent life policy without a medical. For example, say you originally bought a termpolicy to protect a mortgage and child. Once the mortgage is paid and the child grown, you mightfind it desirable to convert the policy into one that will give you a new level premium for the rest ofyour life, and a death benefit that is guaranteed not to expire as you age.When you purchase your life insurance policy, find out if there are any limitations on your age atthe time of conversion. In most cases, you have the option of converting up until you are 60 or 65.As well, ensure you are given several options of the type of policies you can move into, the morethe better.Final tip - choose a life insurance broker you trust:While it doesnt necessarily impact the type of policy you choose to purchase, a rapport with yourbroker is critical in feeling comfortable with the life insurance policy you buy and the informationyouve received.For more information on life insurance, or to get quotes, kanetix.caÂ’s life insurance quote
  4. 4. comparison service provides instant online quotes from some of Canadas most recognized andtrusted life insurance companies.Article Source: ====Learn about life insurance ====