How to Get a Cheap Life Insurance Quote

Cheap life insurance quotes are easy to find on the Internet. All you need to do is visit an insurance comparison website.

Getting started

Before you get started looking for a cheap life insurance quote, you need to make some decisions:

1. Do you want term life insurance or whole life insurance? Term life insurance is cheaper because all you are buying is insurance. Whole life insurance costs more because it includes an investment feature: part of your premium each month is invested.

2. How much insurance do you want? Depending on how many children and how much debt you have, you may need anywhere from two to ten times your annual salary in life insurance. Even parents who don’t have paying jobs need life insurance: If your primary job is to take care of your children, your spouse will likely have to pay someone else to take care of them if you die.

Get Quotes to Compare

Once you've answered these questions for yourself, you're ready to start gathering life insurance quotes. The best and fastest way to get life insurance quotes is to visit an insurance comparison website. On these sites you fill out a form with information about your health, job, hobbies, and the coverage you want. You'll then get fast quotes from multiple A+ rated life insurance companies.

On the best comparison websites, you can even get quick answers to your life insurance questions from insurance professionals through an online chat service or a toll-free-telephone service (See link below.)

Investigate Insurance Companies

Once you have your life insurance quotes, you'll want to check the ratings of each insurance company before you purchase your policy. After all, while you want a cheap quote, you also want a life insurance company that's stable and will be able to pay your claim. To check the ratings of a life insurance company, your best source is a credit agency like Standard & Poor’s (standardandpoors.com), or a consumer rating service like J.D. Power and Associates (jdpower.com).

The Four Types of Term Life Insurance

At first blush, term life insurance seems as though it would refer to just one type of insurance policy. In fact, term life insurance really breaks down into four unique policies.

Term life insurance is the simplest form of life insurance you can buy. It lasts for a certain term of years and you pay a certain amount to have coverage. If the party that is insured passes away, the relevant death benefit is paid out. If they do not, it is not. No cash builds up in the policy in any way.

This is more or less the general way term life insurance works, but most policies fall into one of four variations that differ remarkably. The differences between the variations have to do with either how your fund them or the reason for the coverage. This means the premium payments and death benefit change in various ways.

The simplest variation is the yearly renewable term policy. As the name suggests, this policy is renewed each year. The unique aspect of this policy is it changes each year. The premiums go up, but so does the death benefit.

The level premium term policy offers exactly what the name suggests. The premium is the same every year so long as the policy is in effect. At the end of the term of the policy, you can often get a second term at fairly favorable rates if you still meet the health guidelines of the insurance company. This is known as re-entering the policy.

Decreasing term life insurance is our third variation. With this policy, the premium starts and stays low throughout the term. The death benefit, however, decreases over time. So, why would anyone want such a policy? This policy is given the nickname of mortgage life insurance. The intended use is to pay off the mortgage of the insured should they pass away. As time passes, the mortgage should decrease, which requires less and less death benefit.

The return of premium term life insurance policy is both a mouthful and a misunderstood variation of life insurance. You pay a higher premium than for most regular term life, but you get it back at the end of the policy should you survive the 10, 20 or how every many years. Why would an insurance company offer this? Statistically, enough people abandon the policy to make it profitable. Also, the insurance company reinvests the higher premiums and makes money in the interim. It is like giving the insurance company a free loan.

So, what is the best variation for you? There is no correct answer for everyone. Your best option is to sit down with a financial advisor and discuss your situation to ascertain the best choice.

What You Need in Life Insurance

You probably already know you need life insurance as part of practically any financial plan. That being said, how do you determine how much you need?

Life insurance is much like taxes for many people. You know you should, and indeed, have to deal with it, but you really don’t want to. The stereotypical life insurance agent is enough to make anyone cringe. That being said, understanding why you need life insurance and what you need is going to make life a lot simpler when it comes to purchasing it.

The best way to think about life insurance is through the concept of risk management. What are the biggest risks to you and your family from a financial perspective? For most people, it is a sudden lack of cash or the loss of the primary wage earner. Common pitfalls could be death, disability or a large property loss. With the first two of these, the real problem is a sudden loss of cash on hand to handle debts. If you suddenly lost your job, how long would you be able to meet your mortgage and other bills? For most people, the answer is not very long.

With risk management, the idea is to eliminate the catastrophe of a financial situation. Life insurance is the answer. The idea is that you pay a relatively small amount annually to avoid being put in financial straits if something bad happens. Your family is going to go through an extremely tough time if you die in a car crash, but it will be ten times worse if they are worrying about losing the home and so on. To manage this risk, you can pay a bit now to avoid such problems down the road. I deny it. You deny it. At some point, however, we are all going to pass away.

When evaluating what you need in insurance, it helps to consider immediate and intermediate needs first. They are going to need money to pay things such as funeral costs, medical bills, monthly bills and incidentals. On a more intermediate basis, there is the issue of the mortgage on the home, any other outstanding debts, taxes, education costs and so on. The specifics are dependent entirely on your situations, which is why talking to a financial planner is usually a smart move.

Next, you need to determine the long term income requirements of your family. The best way to do this is to total up your gross monthly bills. Don’t skimp on them. You want a specific list of expenses so you have a good, hard number to work with. Include everything from the obvious of mortgage or rent payments to the sublime of entertainment costs and utilities.

Let’s say it totals $5,000 a month. If the primary wage earner passes away, where is this money going to come from and for how long? How long do you want there to be money on hand? If you have kids that are under age 10, do you want them to go to college? How is the surviving spouse going to pay for the college? As you can see, the numbers add up pretty quickly. At $60,000 a year, your spouse would need $1.2 million dollars in life insurance to cover the basic costs of living for 20 years. This number is actually low if you consider inflation. Throw in the cost of sending the kids to college and you are looking at a figure closer to $2 million.

The key to buying life insurance is to figure out realistically how much you need on a monthly basis and how long you want to provide for your family. Once you do that, it is time to go talk to the insurance agent.

10 Important Things to Remember When Buying Life Insurance

It is always better to find out vital information about life insurance prior to buying cover. This ensures that you obtain the best cover your money can buy.

10 facts about life insurance are:

1. Research the market: It is nearly always preferable to investigate all the cover available and to be clear about the monthly fees before deciding. A great place to source this info is online.

2. The sooner the better: Do not procrastinate in buying a life insurance policy. The best time to purchase a policy is when you are young and in employment. This will give you a choice of great policies.

3. Do not get too much: Try to have just the correct amount of insurance that is within your budget. Getting too much cover will attract increased costs which is unnecessary.

4. Always tell the truth: Never try to misguide when completing the insurance application. If you are discovered hiding facts, such as smoking, the insurance provider may terminate your plan.

5. Stay healthy for lower costs: Health conscious individuals pay the least expensive fees. But, habits like cigarette smoking, too much alcohol, intake of drugs and obesity can make your premium sky high.

6. Never pay unnecessary fees: The fees of some insurance coverage are high due to the fact they also incorporate the commissions of the broker. To prevent this, go with an insurance company that offers policies sold direct.

7. Monthly fees can cost more: One way to keep costs down is to avoid monthly costs. You should therefore go for bi-annual or annual premiums, which are discounted.

8. Check your cover from time to time: You should check your cover when there is a major change in your circumstances, like the birth of a child or your children starting university. Occasional reviews help you to ensure that you are paying the right fees, and that you have the right level of cover.

9. Do not rely upon your employers insurance cover: Most employees are provided with company insurance by their employers. But this may be insufficient for your requirements. Additionally, the group insurance policies get cancelled when you depart the company and because of this can not be relied upon.

10. Higher cover could be cheaper: With life insurance, monthly fees get less expensive as you go for increased cover. As such there is nothing wrong in increasing the cover, if your budget will allow it.