Except for popular medical insurance, which people obtain either at work or from different insurance agents, they usually buy life insurance. It’s another type of coverage for which a person pays a monthly premium, which will be paid out just after his or her death. Sometimes, contracts allow for other events, like terminal or critical illnesses, when money may be taken out. Such life insurances are divided into two main categories. One of them is the protection policy, which usually provides a lump sum payment when a particular accident happens. The other one is the investment policy whose aim is to facilitate the growth of capital by regular or single premiums. In the US, standard forms are whole life, universal life and variable life policies. But before applying for any life insurance, it’s good to follow this checklist and only then make a final decision.
Check your financial status
The first step everyone should take when thinking about buying their life insurance is to check their financial status. Such insurance package is an additional monthly cost, so firstly calculate all your earnings and expenses to see whether you can afford that or not. Then, going to an insurance agent, you’ll already know what your financial goals are and how much you can spend on this purpose. It’s also good to familiarise yourself with individual plans and options available online, for example, on the medicareresources website.
Consider your needs
Once you establish your finances, then you can move to your needs. The first fundamental question you should ask yourself is: “Do I need life insurance?” If you’re filthy rich and you’ll leave lots of money behind, the answer will be “NO”. However, if you have family members whom you want to protect and secure after your death, you’d better choose some package. Not only will it allow your children to pay for your funeral, but also cover an estate tax or your outstanding debt, and in the best case- leave a legacy for your loved ones.
Compare different offers
Choosing the best offer is always the most challenging task. Thus, firstly consider if you prefer term life insurance or permanent. The first option protects your family for a certain period of time, for example, 10, 20 or 30 years. After this time, when children become adults, or their mortgage is paid off, it may expire. Since it’s usually quite cheap, many people decide on this type of life insurance.
The other offer is a little bit different, and it provides your family with lifelong protection. Although it’s more expensive, it seems to be more profitable since after your death it’s paid in the form of a lump sum of tax-free cash.
But opting for your preferable life insurance type is not the end of the story. Then, what you need is to shop around to find the best product, simultaneously at the best price.
Collect all necessary data
After reviewing many offers available on the market and choosing the most suitable for your needs and preferences, you have to prepare yourself to fill in a life insurance application. To do it thoroughly, you need to collect all necessary information about your age, height, weight, lifestyle habits, income, health problems, as well as other insurance packages you already possess. Although you may think that it’s nonsense, which nobody reads, this data is checked in terms of credibility. If you don’t tell the truth, the insurance company may cancel their policy or even refuse to pay the death benefit.
Prepare for a medical exam
Whether you know or not, most life insurances demand from you taking a medical exam. It’s usually conducted by a qualified medical professional, but not necessarily a doctor. It may as well be a nurse who will come to your home to do some medical tests and take samples from you. The primary purpose of this exam is to take your medical history and all the necessary information which may be useful to create your personalised life insurance. But it doesn’t take a long time. It usually lasts around 20 minutes. They only need to verify the information you’ve given in the application.
After the life insurance medical exam, your company will be able to determine whether you’re insurable or not, and what premium they should impose on you.
There are also some companies which don’t require such exams. However, those with exams are more reliable.
Finalise the life insurance contract
The moment your insurance company gets the results of your medical exam and they are compatible with the information given by you in the application, you can finalise your life insurance contract. They may sometimes require some additional medical records from your general practitioner, and you’ll be informed how much your premium is. Since then, you’ll be insured.
Instead, when you fail your medical exam, you should clarify it immediately with your doctor and insurance company so that you could either start treatment or cancel any mistakes from your health record.
To conclude, before buying any life insurance, it’s recommended to go through this checklist step by step so as not to be surprised by any unknown facts.