5 Tips to Buying Life Insurance

Posted by on Feb 5, 2014 in Life | 38 comments

 “Knowledge is Power”  A quote I have always remembered.  knowledge-is-power

When it comes to things like buying insurance, that statement could not be more true.  Planning for your first life insurance purchase  can be an overwhelming and daunting task.  The era of the Internet now allows most of us to get an online quote from the comfort of our home or office chair.  That is a now a standard and acceptable way to research and purchase insurance.  The second way is to meet with an agent to help you.  Life Insurance Agents are sometimes like vultures you wish you would have never filled out the “send me information” card to.  Mostly because their entire income is based on selling you something they earn a commission on.

Don’t get me wrong, buying online or from agent both have their goods and bad and done the right way with the proper knowledge is the key to a successful purchase.

Here are 5 tips on how to research and pick out an appropriate life insurance policy to meet your needs.

1. Understand why You Need Itlife-insurance

Life insurance never about you.  It is about those you care about. Life insurance protects your family from financially devastating losses and help pay for mortgages,  college education, or help to fund retirement for your spouse if you die prematurely. The simple answer is, if others depend on your income for their support, you need life insurance.  

2. Determine the Correct Amount of Protection 

Often times untimely death situations leave families emotionally devastated. Knowing there is a financial plan to assist during the transition is one of the greatest gifts a person can leave for their loved ones.  Determining that value can be difficult.  There are a number of different formulas and calculators used to determine the proper amount of life insurance.  There is also  a simple calculation by taking 8 times your annual salary and using that as an amount.  The truth is, only you can decide what you want to leave your loved ones.  Consider your age and health, their ages, your income, lifestyle, college educations, mortgages, etc.  The younger and healthier you are, the easier decision financially.

3. Find the Right Type of Policylife-insurance-categories

You have two main options,  Term coverage; much more affordable, coverage for a specified term, and Whole Life; expensive, more comprehensive, with cash value and a lot of variables. Understanding the goods and bad of each will help in making the best financial decision.  If you solicit the help of an agent to decide, make sure they fully have your best interest at heart and not their wallet.

4. Make Sure you Know WHO you are Buying From

The quality of the carrier is very important in purchasing life insurance. Go with companies that are known in the industry,  price sensitive, provide the coverage and terms you need and make sure you review the company’s Standard & Poor and A.M. Best ratings.  These agencies rate on claims paying abilities, customer services, and a number of other factors.

5. Remember my First Statement:  “Knowledge is Power”.  Increase Your Vocabulary. download (2)

Life insurance can be confusing, with terms like “premium,” “dividend,” “beneficiary,” and many more. Take the time to read and understand the glossary terms for insurance.


  1. I liked that you had mentioned that it can be important to determine the right amount of protection that would be needed to cover all of the assets. My wife and I have been thinking about getting life insurance policies set up for the both of us. I’ll have to start doing some research into what type of coverage the both of us would need and what would need to be covered.

  2. I can definitely appreciate your advice about finding the right type of policy when you’re looking into buying life insurance. I imagine that for an older adult like myself, it might not be the ideal moment to jump into a whole life plan. Then again, I’m not an expert so maybe it would be. Either way, meeting with someone who knows what they’re talking about seems to me like it would help.

  3. Today we are suspect of “spam” at our Email, abhor pop ups advertising that intrudes on our Internet Searches, and may even be overwhelmed to find the President caricature, or photograph being used as a sells technique for insurance products. “Trust”‘ has always been a value of the world of bankers, and of insurance.

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  5. When beginning college, I had to choose for the first time in my life which types of insurance plans I should purchase and what companies I should purchase it through. I appreciate you helping me learn more about the calculations that can be used to determine the proper amount of life insurance to purchase based on your age, income, lifestyle, etc. Thanks for helping me understand how the process of purchasing insurance can become less overwhelming with the proper resources.

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