Life Insurance Quotes | Getting Coverage and Rates

Getting the best life insurance quotes can be a challenge with so many different options out there.  In addition, knowing what kind of coverage and how much of it you need can be a daunting to navigate through.  Without the right kind of expertise, you might feel vulnerable and exposed.

Even getting quotes online can be unnerving, knowing that once you put in your information for a quote, you'll have agents hounding you to buy insurance.  On top of that, it's difficult to know who to trust to get you the right amount of coverage for the best rates.

If you are nervous about shopping for life insurance, here are some guidelines to help you think through the process.  It will also help you to know when to ask for help from an insurance agent or broker.

You can now get instant life insurance quotes from many different websites. The internet has streamlined this whole process. Most of the common policy types are available online. You can get universal, whole or term life insurance quotes online fairly easily.

The internet has been a huge boon to the insurance industry. It's been a great way for them to find people looking to get insurance. Some websites do it to generate sales leads to sell to agents. For potential customers, it has also been a convient way to get quotes online and have agents contact them.

It also allows some room for competition. Some places get quotes from a variety of insurance carriers. Others are themselves the carrier and will only give you their estimates.

Also, getting quotes has never been easier. You used to have to answer a long laundry list of questions to even get a quotes. Nowadays, you only need your birthdate and gender to get a quote. BUt once you put in your info for a quote, you will get start getting cold calls from insurance sales reps.

Type of Coverage

Most people think about getting life insurance once they start having kids. I never even considered life insurance when I was single. I really had no liabilities, and I had no one depending on me for financial support.

Even when I first got married, I considered getting coverage. But I also knew that if something happened to me, my wife was very capable, enough to get a good paying job.

Everything changed when I had my first baby. I saw how difficult it was for single moms to take care of their kids and work. I didn't want that for my wife and I wanted my kid to have mommy around to raise her.

Although I'm young, I still need coverage. The advantage for me is that coverage is relatively cheap. If you're older it will be a little more costly, but it is still reasonable if you have a lot of financial liabilities that you need to insure.

So the next question is, how much coverage do I need?

How Much Coverage

This is really a question you have to answer for yourself. People will give you guidelines, but there really isn't a right answer. It just all depends on who your beneficiary is and how much you want them to have in the event of your passing.

If you have a large estate, you need to get together with an estate planner. Life insurance is something that needs to be included in the bigger picture of your estate. Estate taxes are a killer, and if you have life insurance but do poorly on your estate planning, you will not do yourself of your family and favors.

If you don't have a large estate, here's a simple way to know how much coverage you should get.

First of all, how much does your family need for annual living expenses. Then decide how many years of living expenses you want to provide for them. This means you have to project out including kids growing up, going to college, etc.

Secondly, consider how much above and beyond living expenses you want your family to have. Of course we all want as much as possible for our families. But it will cost you to get the extra coverage.

My point in laying this out is so you know how much your family needs and how much you want for them. Those are two separate things. Then you can decide what your minimum premium needs to be to get that coverage and then decide how much more premium you can pay every month to provide additional coverage.

Insurance Agent vs Broker

There are two types of insurance sales people. There are insurance agents and insurance brokers. They aren't the same thing.

Insurance agents, which is what most people are familiar with, usually represent only one insurance carrier. For example, Met Life will have agents, Geico will have their own agents and State Farm will have their own. Those agents will exclusively represent one company and will be selling insurance for just one carrier.

Insurance brokers, on the other hand, are independent entities and they work with several carriers. They make an assessment of your insurance needs and wants, then go shopping for the best rates and coverage for you.

The obvious advantage to brokers is that they let carriers compete over your business. They also have the best change of finding the best deals. In addition, they do a lot of the shopping around for you.

With agents, you really should talk to a few different agents before making a decision. That can be time consuming. Also, being in a situation where three different sales people fight over your business is not fun, unless you like that sort of thing.

Word of Caution

Be aware that they make commissions based on how much coverage you buy. That means the more coverage you get and the higher your premiums are, the higher their paycheck.

I'm not saying that all life insurance sales people do this, but, they may try to sell you too much coverage. At the very least, they have a financial incentive to do so. So if you buy too much coverage, they won't protest, with one exception.

If you cannot pay your monthly premiums, their commission gets charged back. They don't want that to happen. So if they don't think you can pay the money premiums of the coverage you are getting, that is the only scenario where they might caution you.

Again, I'm not saying all agents and brokers do this. There are many out there that are genuine, honest and really want to help you and have your interest in mind. I'm just saying that this is a temptation and you should be mindful of it.

Additional Comment

There is a new industry called life insurance settlement where policyholders can sell their policies for more than the cash surrender value but less than the face value.  It's a great way to get additional funds for retirement if you don't need the policy anymore.