Learning to Compare Life Insurance Online

When you are buying a financial product like life insurance, you cannot just buy any type of product offering any amount of coverage.

As you are doing all of your long-term financial planning and you are building a life insurance portfolio to helps you achieve your goals, you will need to compare not just products, but also carriers and pricing.

For consumers who are not well-versed in life insurance, the idea of comparing life insurance can sound a bit intimidating.

Luckily, there are several resources and tools that you can use online to act as an informed consumer without having to contact a friendly but commission-based agent that you are not sure if you should trust.

If you know what factors to consider as you compare life insurance online and what sources you can use at your disposal, you can easily shop for coverage from a space that you are comfortable in and turn your house into the sales floor.

Here are the hard-hitting questions that you must ask to determine which policy is right for you and which carrier is the right one to buy from.

Use our FREE quote comparison tool at the top of this page to start searching for life insurance.

What is my purpose for buying life insurance?

Before you can compare any type of specific product, you will need to know what type of life insurance is best. To differentiate between different plans and to find out what type of insurance is right for you, you will need to sit down and really think about why you want to buy protection.

Virtually everyone, single or married, has even a basic need for coverage whether it is to provide money for final expenses or it is to pay off your mortgage. Here are some of the common purposes of buying coverage:

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  Pay off mortgage or long-term debt when you have a co-signer, partner or dependents

• Provide replacement income for your spouse while you are still working
• Family protection to pay for more than just day-to-day expenses but also the cost of education or for long-term retirement income.
• Coverage to protect your business interest when you own a small business or you have a partner.
• Money to pass on to your heirs to create a legacy or to donate to a charitable cause.
• Funds that will pay for estate taxes if you have a large amount of assets that exceeds the limits to avoid taxation.

Which type of insurance is right for your needs?

Perhaps the hardest part of comparing life insurance when you are doing it on your own is choosing the right type of insurance. It can be confusing when you do not know the difference between term and permanent insurance and then different products that fall into each category.

Here is a brief guide so that you are able to narrow down the best options for you:

What is term life and when is this is the right choice?

Term life insurance is a financial tool that is in place and provides protection for just the term that is selected. Terms can be as short as a year to as long as 30 years. The term that you select depends on how long you will need the protection and also how much you can afford to pay.

Premiums, while they are usually level, are generally higher as the term gets longer. This is because the window where you can file a claim is larger and this presents more risk for the carrier.

Renewable Level Term

There is more than just one type of term insurance, and selecting the right type is just as important as choosing between term and permanent. The most popular type of term insurance is the level renewable term with guaranteed level premiums.

This term lasts between 5 and 30 years and the price and death benefit will stay the same the whole period. When you reach the expiration, you have the option to pass medical exams and underwriting so that you can buy more cover at your older age.

Renewable level terms are best when you want predictability and you want a specific amount of protection while specific obligations exist.

Term insurance will offer you protection when the burdens will go away. If the burdens are lifetime burdens that will always be in your life, you should consider a more permanent option.

Annual Term

You can also choose the annual term policy if you need immediate coverage. Instead of keeping the premium level for years, your premiums will go up each year that you age. This is a good option for some because you do not have to go through the paramedical check up or submit your medical records for approval.

If you are going on a trip out of the country or you need coverage now to fulfill a contract, annual terms can be convenient. They may also be a good choice if you cannot medically qualify for cover and you need a no-underwriting option.

Decreasing Term

Financial obligations may shrink over time as your mortgage gets paid down and your dependents move out of the home. This is why the decreasing term has been created. The death benefits decrease in intervals as you age and your burdens shrink and in turn the premiums decrease as well.

Decreasing terms are best when you do not want to pay for more coverage than you need as you pay down debt or as your children grow up. Obligations may not go away entirely, but they will go down.

What is permanent life insurance and when is it the right choice?

Permanent life insurance is a product that will stay in force your entire life and that has a cash account feature that is used to invest and earn interest.

Permanent insurance is not for everyone because it can cost as much as 10 times the cost of a term plan, but there are several advantages to consider.

There are 3 different types of permanent insurance that are popular for different purposes and preferences:

Whole Life

Whole life is the traditional permanent plan that offers you a level death benefit but also has a component where you can save and withdraw money from the plan.

The company will project the cost of the insurance at the time you take out the policy and then divide up the cost for your life expectancy so that they can collect enough money to pay for a claim when it is filed.

The money in the cash account will accumulate and pay for the increase cost of coverage so that it stay level, and if you earn dividends then you will have an increased death benefit.

Whole life is for people who want to permanent insurance to pay for final expenses, estate taxes, retirement income replacement, and other obligations. It is preferred for people who want to pay the same level premiums the whole time.

Universal Life (UL)

Universal life has a life insurance and savings component but it differs from whole life because it is much more flexible. Instead of paying the same premium, you can fund the universal life plan to pay less in the beginning and raise the premium as your income rises.

You always need enough in the cash account to pay for the premiums, but if you fund the plan right you may not need to pay for coverage at all when you reach retirement. You can get into hot water with this adjustable life plan, but it can be great if you pay attention to the illustrations.

Variable Universal Life

The only difference with Variable UL is that the money is invested into diversified accounts and the interest that your cash account earns can go up and down. While there is more risk, there is also more chance to earn larger profits on your investments.

If you are willing to take on more risk for the chance of more reward, this is a good option. If your purpose of insurance is to have coverage and a savings vehicle, this may be the ideal choice.

What should I consider when choosing a company?

Now that you know what type of insurance you should choose, you need to know what carrier to choose. There are hundreds of life insurance carriers in the marketplace, but not all are very reputable. Here are some considerations to pay attention to:

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  Financial strength and creditworthiness

• Customer satisfaction
• Contact methods
• Product offerings
• Complain index

It is very easy to compare life insurance online when you know what to research.

Once you choose the product and a list of carriers, you need to compare pricing. The quickest and most efficient way to compare premium costs is to use an online rate comparison tool that can connect you with the reputable insurers.

By using this advanced brokerage-style tool and entering your information and zip code, you can price the cost of term or permanent insurance and apply too. Get started with our FREE tool below!