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THE PROCESS OF PURCHASING LIFE INSURANCE

Life insurance is an important protection that many people should have. Most people who get it only purchase it once, though, so many people are unfamiliar with the steps involved in procuring a life insurance policy. If you need life insurance, here's what the process of purchasing life insurance entails.


Step 1: Assess Your Life Insurance Needs


Before you speak to a life insurance agent about getting a policy, first spend some time determining what your personal coverage needs are. You might not know all the details of what to look for in a policy, but you can begin with a few general considerations.


For example, determine why you want life insurance. If you pass away, do you want a policy to:

  • Financially care for loved ones on a long-term basis

  • Cover specific major costs (e.g. a home purchase or college tuition)

  • Pay off your outstanding debts

  • Ensure your burial and funeral expenses are paid for

How large a policy you need will be determined by your purpose for purchasing a policy. If you want a policy to replace your income in the event of your death, you'll likely need a policy that's 10 to 15 times your income. If you only want to cover funeral and burial, you'll need much less coverage.


Step 2: Speak With a Life Insurance Agent


Once you have an idea of what you want life insurance for, an insurance agent can help you with the specifics. You need to speak with a life insurance agent, as opposed to an agent who does only property and casualty insurance. P&C agents, as property and casualty is commonly called, specialize in policies such as homeowners and auto insurance and not life insurance.


An agent will help you specify more precisely what kind of policy you want. They'll guide you through the selection between whole life and term life policies, as well as the exact coverage amount and duration (if you're getting term insurance) of the policy.


An agent will also help you get quotes for different policies, and they'll present you with the various options so that you can pick a particular life insurance policy.


Step 3: Answer the Underwriting Company's Questions


Once you've selected a life insurance policy, your agent will submit the policy application to the appropriate underwriting company. The underwriting company will then call you with a few specific questions. They'll need to confirm details that you gave your agent, and they'll have some other questions. For example, you might need to provide your social security number, tell the company whether you smoke, and state beneficiaries for the policy.


You'll also likely set up payment details for the policy at this point. Many policies can be paid on a monthly or annual basis, but you may be able to get a slight discount if you pay the year's premiums in full.


Step 4: Complete the Physical


Unless you're getting a no medical exam life insurance policy, which is a life insurance policy that doesn't require a medical exam, you'll have to have one completed. Most policies require an exam.


The medical exam is a basic exam that might be given by a paramedic or nurse. In most situations, the examiner will come to your location at a time that's convenient for you to complete the exam. It takes only a short while to do.


After the exam is done, you'll hear back from the life insurance policy when they approve or deny your policy. While the paperwork is being done, a provisional policy is often put in place so that you have coverage during this short window of time.


If you need a life insurance policy, contact Boone Ritter Insurance.


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