In order to conduct a thorough search and perform appropriate comparisons of life insurance policies, you must familiarize yourself with the various types of life insurance available. The Internet offers a wealth of reliable resources — including insurance companies as well as professional outside, objective observers of the insurance industry — from which to gather information on which to base your selection.
Understand term life insurance — the least expensive type of insurance available. It covers you for a fixed period of time and will pay a lump sum to your beneficiaries if you die during the term specified. Policy holders typically pay monthly premiums throughout the duration of the term. If you outlive the term, neither you nor your beneficiaries receive any money. If you stop making payments, your policy will expire.
Understand whole life insurance, which — unlike term insurance — insures you for your whole life. Whole life insurance is more expensive because the insurance company is sure to have to pay something when you die. A whole life policy also features a cash surrender value, meaning that after owning the policy for a designated period of time you may surrender it for a cash payout. Typically, the cash surrender value does not start to rise significantly until between the fifth and 10th years of the policy.
Buy your policy earlier in life. You may qualify for the best life insurance rates when you are young, regardless of the type of policy selected. The sooner in life you purchase your policy, the lower your premium.
Buy only what you need. Most insurance experts suggest buying a policy worth six to 10 times your annual salary. Purchasing policies in that range will help ensure that you do not spend too much on your annual premiums.
Utilize the power of the Internet. You may get a insurance quote from any of numerous websites. Obtain insurance quotes from multiple insurers, then select the policy that offers what you need at the most reasonable rate.
Keep in mind as you explore possibilities that the lowest rate is not necessarily the best rate. As with any comparison of prices, compare the products as well.