Here’s exactly what you need to do to buy life insurance

Est. 7 min read

There are 18.7 million people out there who understand that they need life insurance, but for whatever reason, they haven’t bought it yet. They’re stuck in life insurance limbo. If you’re reading this article, there’s a good chance you’re in the same position.

According to one industry report, the problem is that policies are just too complicated. Life insurance companies use uncommon words in unfamiliar contexts that confuse shoppers and scare them away from buying a policy. At PolicyGenius, we recognize that this is a huge problem, and we want to change that and get those 18.7 million unstuck.

Below, we’ll walk you through every step of the term life insurance application process. You can start from the beginning or skip to the step that’s tripping you up the most. Since the life insurance application process takes a few weeks, save this article as a resource.

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Where are you in the process?

Step One: Get quotes
Step Two: Pick a policy
Step Three: Fill out an application
Step Four: Get your free medical exam
Step Five: Have a phone interview
Step Six: Wait for approval
Step Seven: Pat yourself on the back

1. Get quotes

Using PolicyGenius’ free life insurance quote engine, you can easily get a price quote for term life insurance just by putting in a few pieces of information about yourself, your current income, and your health.

Why term life insurance? For most people, term life insurance makes way more sense than whole life insurance. Term life insurance is what most people think of when they think about life insurance: you pay a premium every month for a certain period of time, called the “term,” and if you die while the policy is active, a beneficiary you choose gets a death benefit.

Whole life insurance, sometimes called “permanent” life insurance, is a much more complicated beast. It’s 50% insurance policy, 50% investment portfolio, and 100% doesn’t make much sense for most shoppers. Read more about why we suggest term life insurance over whole life insurance.

Before we got much further, let’s break down some of the words we just used:

First up is “premium.” If you’ve ever bought insurance before, you’ve probably come across this term. You can think of a premium as a “monthly payment” on your insurance policy, but you can also pay it annually.

Second and third – “beneficiary” and “death benefit.” These two go hand in hand. A beneficiary is someone who receives a death benefit. (You: “Uh, that wasn’t helpful.”) The death benefit is the big payout that happens if you die while the policy is in effect. You decide this when you buy the policy. (Quick shopping tip: the bigger the death benefit, the more you’ll pay in premiums.)

Fourth – term. The term is how long the life insurance policy is active. For the length of the term, you’ll be paying premiums. If you die during the term, your beneficiary will get the death benefit. If you die after the term? Sorry, no dice. Most term policies have the option to convert to a permanent policy at the end of the term, but it will be at a higher premium.

When you’re going through the PolicyGenius life insurance quote engine, we’ll help you decide things like how long you want the term to be (usually between ten and thirty years) and what you want the death benefit to be.

Usually, people buy life insurance to help cover end of life expenses and any leftover debt, like mortgages or student loans. The larger the death benefit, the more expensive your premiums will be, so make sure you know what you want to cover before you start shopping.

Once you have quotes, you can move on the next step…

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2. Pick a policy

Once you’ve picked things like the length of your term and the amount of coverage you need, there’s only one big difference between policies: price.

Comparing prices between life insurance policies is easy with an independent broker. An independent broker can run quotes for you based on your specific requirements, allowing you to easily price compare policies.

Using a broker does not cost you any money. I’ll repeat this again, because it’s super important: using an independent broker or agent is completely free to you.

“But nothing in life is free!” you might argue. You’re right: a broker’s fee is built into your insurance policy premium. There’s no way to get around this, either, even if you try to buy your policy directly from the company. Since life insurance companies are state regulated, pricing tables need to be reported to the state. A broker’s commission is built into that pricing table, so whether you use a broker or not, you’re paying the same price.

And since those pricing tables are state regulated, every broker is going to get you the exact same price. Different brokers won’t be able to get you any secret discounts. Want more information about brokers and agents? Read our complete explanation.

PolicyGenius is an independent broker, but instead of going to someone’s office, you can go through the entire process online and in the comfort of your own home or office. Once you’ve gone through PolicyGenius’ quote engine, you can immediately head to the next step…

3. Fill out an application

PolicyGenius makes it easy to fill out an application online. After getting a quote, you can start the application process, which takes about eight minutes to complete. Be ready with documentation about your income, like your latest tax return. You’ll also be asked to sign authorization forms that allow your health information to be shared with the life insurance company.

Want help filling out your application? You can set up a time for a PolicyGenius expert to call you or call them yourself during normal business hours. PolicyGenius experts are licensed and will not share your information with anyone except the life insurance company.

4. Get your free medical exam

A lot of people get nervous before seeing the doctor. It might make you even more anxious if your medical exam will eventually affect how much you pay for life insurance.

You shouldn’t be nervous. This medical exam is completely free, takes about half an hour, fits into your schedule, and can take place in your home or office. It is designed to be as convenient as possible for you.

Have your doubts? We wrote an entire article breaking down the insurance medical exam and what it means for you. And don’t forget: getting the medical exam does not commit you to buying the policy. It’s completely free with no strings attached.

5. Have your phone interview

Imagine this as a casual “get to know you” conversation over drinks or coffee, except you’re on the phone and buying life insurance.

Your interviewer will ask you some basic questions about your lifestyle (do you spend Saturday nights reading or jumping over gorges on your skateboard?) and your health history. The life insurance company should provide you with a list of questions beforehand so you aren’t surprised. The phone interview will be around twenty minutes long.

Another tip: have the name, address, and phone number of your primary physician and any other doctors you’ve seen in the past few years ready to go.

6. Wait for approval

Congratulations! You’ve made it to the underwriting process. The only thing left to do is wait.

What is underwriting? Underwriting is the processing of assessing risk. Your insurer will use your medical exam and the phone interview to help determine the final cost of your policy, helping to minimize the insurer’s risk while keeping your policy competitively priced. (Remember the 2004 romantic comedy Along Came Polly? Just think of Ben Stiller and his risk analysis software.)

Underwriting can take anywhere between two and six weeks to complete. What slows down the process? Doctors. If you have any major health issues, the underwriter will want to look at medical records. Doctors’ offices are notoriously slow at responding to those requests, taking as long as three weeks per request.

When your policy is ready, your insurance company or your broker will send it along by mail (or with one of those companies where the drivers wear shorts to work). Sign all of the papers, authorize your payment method, and then…

7. Give yourself a pat on the back

Congratulations! You’re insured! You are no longer one of the 18.7 million stuck shoppers.

Once you get your policy in the mail, make sure you keep it in a safe place. And help your family and friends by sharing this article with them so they know exactly how to buy life insurance.

Photo: cybrarian77

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Published on February 9, 2015

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Adam Cecil writes for PolicyGenius, a digital insurance brokerage trying to make sense of insurance for consumers. You can read more of his writing on his site.
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