How Does Life Insurance Work? Your Step by Step Guide Buying life insurance isn't like buying a car or a sofa. You can't just order it online, or even buy it in a store. You know that life insurance is important, but how does life insurance work? How do you get life insurance coverage for your family? Choosing a Life Insurance Policy Life insurance works to protect your family. In order to get life insurance, you will need to decide: • • •
Which type of life insurance to buy? What death benefit amount you need. What riders you want, if any.
Talk With An Independent Agent How can you decide these things? Generally, you will need some help. Talking with an independent life insurance agent is a good idea. Why? • •
Because life insurance is a complicated decision and you need guidance. Because independent agents offer you more choices in insurance than a captive agent who works only for one company.
Moreover, an experienced independent agent can help you understand things like: • • •
Different types of life insurance. What is term life insurance. What is permanent insurance and how does it work.
They can also ask you detailed questions about your lifestyle and health history so that you can get a more accurate quote. Additionally they can steer you to applying for insurance from the carrier most likely to give you a favorable rating. Applying for Life Insurance Your agent will help you through the application process. You will need to answer questions about: • • •
Your age, height, weight and smoking/non-smoking. Your health history. Your family's health history.
In addition, you will have to have a medical exam and blood tests which your agent will schedule for you at your convenience. Sometimes, depending on your medical history and or your age and amount of insurance, the company may want to review your doctor's records. Getting Life Insurance Your application will be examined by the insurance company underwriter, who uses company underwriting guidelines to give you a rating which determines if the company will offer you a policy, and if so, at what premium price. After the life insurance company gets your acceptance of their offer and receives your payment, they put your policy in force. After that, if you have any changes in your needs or questions about life insurance policy changes, your independent agent will be your guide. The Bottom Line Life insurance is not just an extra, it is a necessity. That is why it is so important to get good advice and information from an independent agent. What life insurance really does is makes you and your family secure. When the main bread winner passes away, life insurance can help the family stay in their home, pay off debts, send kids to college and care for the remaining spouse. This is really how life insurance policies work.