When you shop for limited pay life insurance, you may only be concerned with the price. If this is you, then you are really interested in term life insurance. What you really want is good coverage at a low price with a company you can trust. Getting started, though, can be tough. This is why you’d want a checklist.

1. What do you need the insurance for?

You need to think about this. For example, do you want to have insurance coverage that will:

Cover your final expenses?
Pay the outstanding balance owing on a mortgage and other debts?
Cover your income when you’re gone?
Contribute to the future education of your children?
All of the above?

Knowing what you would like to accomplish with your life insurance policy and approximately how much you need to achieve these goals will help you determine how much life insurance you should consider purchasing. Online life insurance calculators are available to help you put a dollar value on the amount of coverage you need.

2. Who would you like to insure under the life insurance policy?

Most insurance companies have many different products to suit your lifestyle and family needs. You can get an insurance policy on your own life, or you can get one policy for both you and your spouse (called a joint life insurance policy). The most common joint life policy provides coverage when the first partner dies, leaving the life insurance benefit to the surviving spouse.

3. How long do you need the policy?

You don’t have to know exactly how long you’ll need your policy, although it does require that you estimate the timing of your life insurance needs. For example:

When will your home be paid off? The amortization period of your mortgage will often determine how long your term life insurance policy should be.

When will your children be finished school? At some point, you won’t need to keep saving for your kid’s education. When are you planning to retire? After you retire, your kids are gone and you probably have paid off your debt.

Knowing how long you need coverage helps you pick the right policy. Online tools are available to help you figure out which term for your life insurance policy is most recommended for people with similar lifestyles.

Now you know how much, who and how long questions answered, you’re ready to shop.

1. Compare life insurance quotes from multiple companies:

Get several quotes because life insurance rates can deviate substantially depending on the product you choose, your age, and the amount of coverage you request. This ought to be simple, because with the Internet you can compare life insurance quotes easily, online, anytime.

2. Which policy has been quoted standard or preferred?

There are only 2 main groups you should know about when shopping for life insurance coverage: standard rates and preferred. Standard life insurance rates are the rates the majority of Americans qualify for.

Preferred life insurance rates are typically offered to very healthy people and means you may pay a smaller premium than most. You need a medical exam for preferred rates. It will depend on your blood pressure, cholesterol levels, height, weight, and family health history. But, they could save you money, as much as 30%.
When comparing prices, make sure you’re comparing ‘standard to standard’ or ‘preferred to preferred’ life insurance rates. If you’re not sure, ask the broker. You could end up surprised at the coverage you get in the end.

3. Review the life insurance broker’s availability:

Is the broker easy to contact? Do they have time for you? Whether it is through their website or telephone, the life insurance broker should be easily accessible to you should you ever have questions or need to speak to them about a change in your life insurance needs. Look for 800 type numbers.

4. Review the medical information required to obtain whole life insurance:

Usually, you get the best rates when you don’t hide anything from the insurance company. If there are little or no medical questions, you can bet the premium is higher for the same coverage then a plan asking for more information. Depending on the company, your age, and the amount of coverage you want, you will probably have to give a urine and blood sample. To obtain the samples, a nurse will visit at not cost to you.

5. Consider a life insurer’s financial stability and strength:

You want to consider a company’s comdex score. There are organizations out there, like A.M. Best, that evaluate insurers and provide a rating on their stability and strength.

6. Ask about renewal options and requirements:

Once the initial premium is set, it is usually guaranteed for the length of the policy (often 10 or 20 years). But what happens when the policy expires? Most life insurance policies are renewable until you are 70 or 75 so don’t forget to ask your broker if you will have to take a medical to renew your policy. While your premiums will be higher on renewal, find out if they will also be guaranteed to remain level for the second term of the policy.

7. Confirm the policy can be canceled without penalty:

Make sure you can cancel without a penalty if you need to. Make sure to check with your broker to see if the life insurance company has any unusual cancellation policies.

Make sure you are working with someone you trust:

This has nothing to do with the insurance policy, but a rapport with your broker is critical in feeling comfortable with the life insurance policy you buy and the information you’ve received.

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