Shopping for life insurance can be a deeply personal experience. It is, after all, your family that you want to protect. We asked Robert Bland, chairman and founder of Life Quotes, Inc., a GEICO partner, for five questions to ask about life insurance before making one of the most important purchases of your life. Continue reading to learn life insurance tips and what you should consider asking.
1. Do I have debt or dependents? Who should be my beneficiary?
What would happen to your family without you? Their financial security is one of the first things you need to consider, and income replacement is one of the top reasons why people buy life insurance. “Life insurance is a very effective purchase to care for your loved ones or create an estate.” A life insurance beneficiary is who you select to receive the money from your policy’s death benefit if and when you pass away. Most commonly, this is a spouse or child.
2. How much coverage do I need?
How much life insurance you need can be a tough but crucial question to answer. The industry benchmark is 10 times your annual income, but that can vary depending on your personal circumstances. “How would your family make ends meet if your paychecks stopped coming in? Imagine what amount of money would be needed to replace your income each year for the next 20 to 30 years.”
Consider other outstanding large debts such as your mortgage; you’ll want to add that amount to your coverage as well. “It’s a good idea to have enough life insurance to cover any debts, like your home mortgage, and then add a little extra coverage to the policy that leaves your family a nest egg.”
3. What term should I get?
One way that term life insurance makes the whole process easier and less intimidating is how flexible (and affordable) it is. Term life insurance provides straightforward death benefit protection without any expensive “cash value” or investment component add-ons. “Discuss your general income needs with an agent who will help you calculate the best policy terms and limits within your time frame.” (Get info on Whole Life Insurance here.)
4. What’s my medical history?
You may be fit as a fiddle, but you’ll still need your health records for the initial assessment. “Get all the facts about your health history in order because you will be asked about them.” Don’t be discouraged, though; a standard term life policy will typically cover death by any cause at any time, except for death by suicide within the first two policy years (one year in some states).
5. How do I get the best price?
You can compare multiple quotes on life insurance right away through the GEICO Insurance Agency. “Prices vary significantly, and you can see that on our site in seconds.” When shopping for life insurance, you should look for companies that offer flexible payment options that allow you to pay on a monthly, quarterly, semi-annual, or annual basis, which makes term life insurance even easier to afford.
By Sam Song
Drew Harrison says,
Knowing your medical history can help you in many ways. For example, my grandfather died of cancer, so I know I need to be careful about my diet and get screened every so often. I also know that life insurance will be a good buy for me when I start getting towards that age. I’ve got to make sure my family is cared for. Great tips!
Johnson McGee says,
Thanks for sharing these tips! I didn’t have any idea the industry standard for insurance coverage was 10 times your income. I wonder why it’s so much more than what you make. Perhaps it’s this way just in case something serious happens. Medical expenses can be draining, and more coverage equals more peace of mind.
Rhys Rawson says,
Thanks for the tip about getting my health record for an initial assessment for life insurance. I want to make sure purchasing insurance goes quickly and easily, so I’ll be sure to get all my records together. Do you have any other advice for me?
Gus Chiggins says,
Knowing how much coverage you need is one of the important steps. Becoming insured has been a great asset to me and my family. Having a dedicated individual to help answer all my questions was incredibly helpful. I am so glad I was able to find what I was looking for.
McKayla Strauss says,
It’s really good to know that you’ll need your health records for the initial life insurance assessment, regardless of your current health. I’m planning on searching for a good life insurance policy in the near future, so I’ll have to see what needs to be done to get those health records. I haven’t had any major issues, so that shouldn’t have an impact on whether or not I get approved.
Delores Lyon says,
Thanks for sharing these tips on choosing the right life insurance! I think it is really nice that you can choose things like coverage and the length of coverage depending on your needs. Plus, it is nice that you can set the terms of the policy and have it pay off certain debts you have– although no one wants to think about death, I think that getting life insurance is a smart choice for any family. It’s better to be safe rather than sorry!
Chase Wilson says,
Good tips Sam! I have always wondered what I would do if I got hurt at work. I should probably go review my coverage. Is life insurance only if death is involved? Because otherwise it would just be health insurance, right?
Jamarcus Dantley says,
I’ve been shopping for life insurance but I haven’t been sure which direction to go. I like your tip about making sure I know the amount of coverage I need. This can really help to make sure I don’t short myself. Thanks for sharing these tips.
Zach Thalman says,
Your medical history can really help you with finding the best coverage. If you have gone to the hospital more than a normal person would, I think it is safe to say that you need something that is going to give you more of a full coverage. I think figuring out what coverage you need is the hardest part when it comes to finding insurance.
Lilly Sedrick says,
When it comes to life insurance it really is important that you take the time to think about the people that depend on your financially and what will happen to them. It is really good to know that when you are seeking life insurance that you will be asked about your medical history. It is really interesting how much of an affect that can have on your insurance policy. I also agree that it is a good idea to think about how much coverage you need. I had no idea that the ideal was 10 times your annual income.
Zach Thalman says,
I think everyone asks or wants to know how much coverage they need. In some cases, I have just gone for complete coverage because then you never have to worry about if you are covered for something or if the insurance will be able to help. It is something I learned from my parents who had us under full coverage on our health insurance.
Kim C. Greer says,
The good thing about life insurance in New Jersey is that you can choose how much you want to buy and where it should go. This enables you to think about the future for your loved ones, too. You can help them pay for college, get them started in business, ensure continued medical care if they should need it, or even provide them with some inheritance money, too. Of course, it is also possible that it may not be needed at all.
Serge Duval says,
This is a good list of things to consider when it comes time to shop for life insurance. The fourth point is a good one to start taking care of before doing the rest of the process because it can take some time. I’m going to hold onto this article for when I start planning for these things more. Thanks for sharing!
sean says,
I like your advice on discussing the policy and term with your agent. I think your guideline to get enough life insurance to cover any debt and leave your family with a little nest egg is a great guideline. Losing a close family member is hard. It becomes even harder when a family has to worry about any debt left behind and has no way of providing for themselves.
Wally West says,
This is really helpful information. Thank you for sharing. I have been looking into getting some life insurance, and I don’t know what I am doing. I have been trying to find as much information on the internet as possible. This article has really helped me understand what I need to look out for. Hopefully I am able to find the right coverage soon.