Your guide to buying affordable term life insurance online ~ Auto accident attorney

Whether it’s ordering groceries on your phone, doing some daycare intel on your laptop, or scrolling through your iPad to get caught up on your budget, it’s a fact that most of today’s to-do lists can get done online and on your own time.

The same is true for purchasing quality term life insurance. In the past, buying a policy was a process that took place over several weeks, with paper applications, faxes, and back-and-forth games of phone tag, just to wait and see if you were approved for coverage. Now, there are affordable and dependable options (thanks to innovative agencies like MassMutual-backed Haven Life) that can be conveniently accomplished online.

Since we’re kind of experts at this topic, here is our guide to buying the right term life insurance policy online for your loved ones and your budget.

Part 1: Understanding life insurance

What is life insurance?

Along with budgeting, emergency saving and retirement contributions, life insurance is one of the most important aspects of a complete financial plan. A life insurance policy is a contract between you and a life insurance company that helps financially protect your loved ones if you pass away. You pay a monthly or yearly premium and if you die while the contract is in place, the insurer pays a death benefit (policy payout) to your beneficiary.

According to LIMRA, as of September 2017, 54% of Americans own some amount of life insurance — either through an individual policy or group life insurance through work. And why do those 180 million Americans choose to buy life insurance? LIMRA found that the top three reasons were:

Covering burial and final expenses
Helping replace lost wages or income of a wage earner
Transferring wealth or leaving an inheritance

Your life insurance policy can be your family’s financial safety net.

Check “buy life insurance” off your to-do list

A very simple way to accomplish a very important task

Advantages and disadvantages of life insurance

Just like puppies, vacations and cupcakes, there are pros and cons to owning life insurance coverage. But, they might not be what you think.

Benefits of life insurance

It’s cheaper and easier to get than you think. Term life insurance is one of the simplest and more affordable types of life insurance. With monthly premiums often being anywhere from $20 – $50 per month for healthy individuals. Additionally, this type of coverage can usually be applied for and, if approved, purchased easily online.
It’s usually tax-free. If you were to die with a term life insurance policy in place, the death benefit is usually paid to beneficiaries free from income taxes. When you’re deciding how much to get insured for, you can work out your family’s future needs without trying to calculate what happens if the tax code changes over the next couple of decades
It gives you peace of mind. A term life insurance policy can give you tremendous tranquility, knowing that there is a financial backup plan for your family. If you outlive the term, you don’t get the money you spent on the premium back (but you’re still alive, which is incalculably valuable.)

Disadvantages of life insurance

It costs money. While, yes, life insurance might seem like another budget line item, it’s probably more affordable than you think – especially if you buy term life insurance. A sample quote for a 20-year, $500,000 policy would cost a healthy 35-year-old woman about $24 per month. That’s less than the average person spends on coffee.
It forces you to think and talk about death. There’s no denying that talking about death with your partner or loved ones can be distressing. However, discussing mortality can have real upsides: like the peace of mind that comes with life insurance coverage or an understanding of preferences for end-of-life care.
It brings your responsibilities front and center. You don’t get life insurance for yourself, you get it for those who depend on you. It can be daunting to accept the number of dependents and financial responsibilities you have on this earth that may outlive you, which is what makes life insurance so important.

What does life insurance cover?

People often have large expenses in mind when they buy a life insurance policy – things like the mortgage, college tuition for the children, and final expenses. While a policy can definitely help cover those expenses, it’s also valuable for the smaller everyday bills that can provide a much-needed financial safety net during a difficult time.

Common expenses a life insurance policy’s benefit can be used to help pay for:

Funeral, burial, and other final expenses
The mortgage
Other debts like a car payment, credit card balances, private student loans, taxes, medical bills, etc.
Day-to-day bills like the phone bill, internet, car insurance
Childcare expenses
Lost income
College savings for your child
Leaving a financial legacy

Part 2: Choosing the right policy for your needs

How much life insurance do I need?

Determining how much life insurance you need is part art, part science. A common rule of thumb is to have coverage that’s at least 5 to 10 times your annual salary. So, for example, if you make $60,000 per year, you might want to consider coverage between $300,000 and $600,000.

A rule of thumb, however, is just that: a rule of thumb. While it can be a starting point, there are other factors to consider like your debts and how many financial dependents you have that will help with choosing the right amount of coverage.

Fortunately, there’s a simple solution: an online life insurance calculator. These free-to-use online tools take into consideration your age, income, marital status, debts and number of dependents to provide a recommendation that’s more personalized than the rule of thumb. It’ll even tell you if you don’t need coverage.

Choosing the right type of life insurance for you

If you have already started the researching process, you have probably noticed that there are many types of life insurance coverage. Term life insurance. Whole life insurance. Accidental death insurance. Guaranteed issue. The options can seem endless.

While it’s always nice to have options, choosing the right policy for your needs can be a bit overwhelming when you’re sorting through them all. To keep it simple, there are two main types of coverage: term and permanent policies.

Term life insurance

Term life insurance is one of the simplest and most affordable types of policies. It is characterized by its set “term” of coverage, which is usually 10, 15, 20 or 30 years. You have coverage during the years you need it most — until your mortgage is paid off or your kids are adults, for example. There are many types of term life insurance policies like simplified issue or return of premium coverage — but for most, medically underwritten term life insurance will offer more coverage options and the most competitive pricing.

A sample medically underwritten term life insurance rate for a healthy 30-year-old man buying a 20-year, $750,000 policy is $31 per month.

Permanent life insurance

If you want life insurance that lasts the rest of your life, then permanent life insurance may be the right choice. Permanent life insurance comes in a few varieties – the most common being whole life and universal life. Unlike term, permanent policies provide coverage for a lifetime and include a cash value component that can grow or decrease over time.

These features are why permanent policies can cost anywhere from 5 to 20 times more than a term life policy. Due to the significant difference in premium costs, permanent policies can be less affordable for younger, cost-conscious families. Or, it can cause people to get less coverage than they need due to what they can afford.

A sample quote for the same healthy 30-year-old man buying a $750,000 whole life insurance policy (lifetime coverage) would be $690 per month.**

Term versus whole life insurance

One of the most popular (and sometimes heated) debates with life insurance is whether to purchase term or whole life coverage. Ultimately, the right decision for you will come down to your budget and what you want from your life insurance coverage.

Term life insurance might be the right choice if you:

Are looking for an affordable way to financially protect your family
Need coverage until your children are financially independent
Need a policy to help pay specific cosigned debts (i.e. a mortgage or student loans)
Have, or plan to have, substantial money saved for retirement

Permanent life insurance might be the right choice if you:

Seek coverage that lasts a lifetime and won’t expire before you pass away
Are seeking a product that offers a cash value component
Can afford the 3-figure premium payments on a monthly basis
Want life insurance to be part of your long term-financial strategies

Do both spouses need life insurance?

When you buy an individual life insurance policy, it’s common to wonder if your partner should have a policy, too. Often, the answer is yes.

With a marriage or a lifelong partnership comes a myriad of shared financial responsibilities and dreams you are working together together. Even if one spouse out-earns the other, both bring immense value to the team that would be sorely missed. Not to mention, most people would want to leave their partner in a good – if not better – financial situation, if they could. This is where life insurance comes in.

The following couples can both benefit from coverage:

Both partners rely on life insurance through work, which is typically not enough to cover the recommended 5 to 10 times your annual salary rule
You share significant bills or debts, like a mortgage, and rely on both incomes to afford it
You have kids or are planning to have them soon
One partner is a stay-at-home parent
Both of you would like to leave a financial legacy to the other

How to get quotes for term life insurance

When shopping for the right coverage, you’ll want to compare quotes across life insurance providers to ensure you’re getting competitive pricing for your policy. Keep in mind that initial quotes may be different from what your real, final rate will be because there are a variety of factors that go into pricing.

When determining your premium pricing, a life insurance company will ask questions about:

Age
Gender
Smoking, drinking or drug habits
Health and family health history
Occupation
Hobbies

This information is used to determine the risk you represent to an insurer, so the lower the risk, the lower your insurance premium will be. As you might expect, younger, healthier individuals get the best rates. Conversely, if you smoke or have smoked, you can expect to pay a higher premium. Women will typically have lower premiums than men because they live longer than men and certain occupations that are more dangerous than others come with higher insurability costs.

The amount of coverage and the length of the term you select will also be major drivers in your premium price. The more coverage you purchase and the longer the term length, the higher the premium will be.

Average cost of term life insurance

The cost of a policy will depend on your age and health as well as the term length and coverage amount you choose. The following are sample monthly rates for a Haven Term policy, issued by Haven Life’s parent company MassMutual.

Excellent health

10-year, $250,000 for a 45-year-old man: $19.37
15-year, $1,000,000 policy for a 40-year-old woman: $38.96
20-year, $500,000 policy for a 35-year-old male: $23.34
30-year, $750,000 policy for a 30-year-old female: $42.34

Good health

10-year, $250,000 for a 45-year-old man: $24.11
15-year, $1,000,000 policy for a 40-year-old woman: $51.02
20-year, $500,000 policy for a 35-year-old male: $31.95
30-year, $750,000 policy for a 30-year-old female: $52.68

Average health

10-year, $250,000 for a 45-year-old man: $35.09
15-year, $1,000,000 policy for a 40-year-old woman: $88.05
20-year, $500,000 for a 35-year-old male: $48.32
30-year, $750,000 policy for a 30-year-old female: $83.04

How you can save money on life insurance

Even with the affordability of term insurance, we’d always like to pay a little less, right? Check out these tips for how to save on your term life insurance premiums.

Buy coverage while you’re young and healthy. It’s easier to put off buying life insurance for another day, but none of us has a crystal ball and can see what the future holds for us. Buy a policy when you need it and before any health issues may arise. Conversely, use buying life insurance as the excuse you need to quit smoking. Most insurance companies will let you qualify for non-smoker rates after one or two years without tobacco.
Buy the right policy for your needs. The type of life insurance policy you buy will have a direct impact on premium pricing. Generally, medically underwritten term life insurance is one of the most affordable types of coverage with premiums lower than that of simplified issue term life or whole life, for example.
Select the proper coverage amount (and term length) from the beginning. You shouldn’t pay for $1 million in coverage unless you need that much. You also shouldn’t skimp on coverage that’s meant to be your family’s financial safety net. Buying the right amount of coverage for your family will prevent you from overpaying and also from needing to buy more coverage later on.

Choose a healthy lifestyle (you can double the payoff of stopping smoking and making healthy eating choices through better health and lower premiums)

How to select the best life insurance company

Like just about every other consumer purchase item out there, you have plenty of choices when you are looking for a life insurance company. A quick Google search for “life insurance companies” returns more than 1 billion results.

Fortunately, consumers have the assistance of a number of third-party agencies that rate the financial health and claims-paying ability of life insurance companies. For example, one frequently-referenced rating agency, A.M. Best, has been around since 1899 and only rates life insurers. Other leading rating agencies include Fitch, Moody’s and Standard & Poor’s.

It’s important to get familiar with the rating agency whose grades you’re considering as they vary across each. For example, MassMutual, which issues the Haven Term policy, has an A++ rating from A.M. Best* (Superior; Top category of 15) and also has a Fitch rating of AA+ (Very Strong, Second Category of 21). The highest and second highest ratings available, respectively.

Additionally, don’t forget the value of customer reviews. As you already know, reviews can help you learn from other people’s experiences so you can choose a company or agency that offers the simplest process, affordable prices and real, caring people to help along the way. If a company has frequent, unresolved complaints, that may be an indication that it isn’t prepared to meet your needs.

You don’t have to look far to find customer reviews. A quick search of “[insert company name] reviews” is a great place to start. It can quickly turn up everything you need to know from the standpoint of consumers, media, and experts. You can also often find reviews on Trustpilot, Consumer Affairs, Good Financial Cents and company Facebook pages, which all specialize in sharing customer experiences.

Pick the best life insurance company for you

Find out how ratings can help you pick the right policy for your family

Buying life insurance the easy way

Researching and buying the right life insurance policy is easier than ever thanks to modern technology. You can now apply for quality coverage from your computer, phone or tablet — and all at a time and place that’s convenient for you. You can expect the following when purchasing a policy online.

Simple online life insurance application process

With startups like Haven Life, you can easily apply online for coverage. And helpful, human customer support is available if and when you need it.

During the online application process, you will be asked about your age, lifestyle, personal health history, family health history and fact check it with third-party vendors like the Medical Information Bureau, DMV, and Social Security Administration to ensure all is accurate. This isn’t any more information than is required by other insurers; the information is analyzed in real-time instead of over the course of several weeks.

If your application is approved, you can start coverage that day. For medically underwritten coverage, it’s common to need a medical exam to verify the application information and to finalize your rate. At Haven Life, if a medical exam is needed, this can be taken at a time and place of our convenience. Often, you can still have temporary life insurance coverage while you wait for the medical exam results and a decision on your application.

Taking a life insurance medical exam

With Haven Life’s InstantTerm process, some eligible applicants will be able to skip the medical exam. That’s because, in partnership with MassMutual, Haven Life has built technology that can analyze application information in real time. If the insurer has a good enough understanding of your health and risk, the formality of an exam may not be needed. [Keep in mind: it’s very important to be honest when completing the application. The issuance of the policy or payment of benefits may depend upon the answers given in the application and their truthfulness.]

Some may dread the thought of a medical examination but the process is really very simple. In addition, many companies make the process even easier by sending the medical paraprofessional who will conduct your exam to your home or workplace.

For the better results (and lower premiums), you’ll generally want to fall into the following groups:

Blood pressure under 130/80
Cholesterol of 220 with an HDL ratio of 4.5 or less
A “normal” BMI of 18.5 to 24.9.
No detection of nicotine, tobacco or drug use
No detection of diabetes, cancer or any other major illnesses

Life insurance for people with a life

You budget online. You invest online. Why not apply for your life insurance online?

Naming primary and contingent beneficiaries

When you get down to it, the entire goal of life insurance is to take care of your loved ones, which is why the selection of your beneficiaries is a crucial part of the application process.

You will need to designate primary beneficiaries and contingent beneficiaries. What’s the difference? A primary beneficiary is a designated individual, chosen by the policyholder, who would receive the proceeds of the insurance policy (the death benefit) if the policyholder dies.

A contingent beneficiary is your back-up. If for some reason the primary beneficiary is unable to receive the death benefit, the contingent beneficiary will receive the policy proceeds.

Typically, people list their spouse or partner as the primary beneficiary and their child as the contingent beneficiary. However, your beneficiary can be anyone whom you intend the life insurance proceeds to be paid to – that can be parents, friends, siblings, a favorite charity, a living or revocable trust and more.

Is life insurance worth it?

We all have plenty of demands on our income and our time. When looking at your budget line items, it’s easy to wonder: is life insurance worth it?

The answer to that question is a resounding yes.

We’d all do anything to protect our loved ones and to shield them from the burden of our death. A life insurance policy serves as a financial safety net for your family so they can be comfortable if something happens to you.

An added bonus of life insurance coverage is the peace of mind that comes with it. Knowing that, no matter where you are, there’s a contingency plan to help protect your spouse, your children, your life, is a powerful feeling that brings an abundant amount of inner peace.

Rachel Parisi is a freelance writer and attorney. She focuses her writing on insurance, financial services, and employee benefits. In her previous life, she served in the United States Air Force as a missile combat crew commander (think ‘Wargames’).

** quote from State Farm

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