Are you thinking about buying life insurance online? Well, you're on the right track. Every adult should have at least some type of life insurance. The type of policy and the amount of coverage differs from person to person, but the idea of getting covered is a smart step. But purchasing anything online can be tricky if you don't know a few key concepts about the product or service, the seller, and the unique factors of Internet commerce. Here's a quick guide for anyone who is considering obtaining a life insurance policy from an online seller.
Use a Reputable Company
There are literally hundreds of sellers in this competitive market. Many are based overseas, operate out of very small offices, and exist to do one thing: separate you from your hard-earned money. As is the case with so many services and products we purchase, it's best to do business with a company you know, or have at least heard of.
The good news about this warning is that you can find detailed information about all the top sellers of life policies. This makes comparison much easier. But even more important than doing cost and benefit comparisons is finding out each company's reputation in the business community. When you shop for a policy, try to stick to insurers who are top-rated and have been around for a while. Avoid newcomers, firms based outside the U.S. or Canada, and sellers who offer unusually low or outlandishly high prices.
Know How Viatical Settlements Work
Before making a final decision, ask about how you would go about getting a viatical settlement should you ever want one. That's when a policyholder sells the contract to a third party for an amount less than the full face value but more than the policy's current cash value. You'll want to have this option in your contract to leave the door open to sell your policy should you ever become terminally ill. For people who are diagnosed with serious illnesses, a viatical settlement can be a good way to gain access to cash and pay off bills on short notice.
Don't Be in a Rush
If you want to get covered by a specific date, for whatever reason, avoid purchasing online. Face it, buying anything while you are under the gun is usually a bad move. Don't get locked into an insurance contract with an online seller unless you have enough time to get all your questions answered, speak directly with a live agent, and go over the fine print for at least a day or two before signing anything.
Know How Much Coverage You Need
The bare-bones principle of getting coverage on your life is to replace your income in the event of death. Consider purchasing about three years' worth of your income. That amount, called the death benefit, should be enough to give your loved ones enough of a financial cushion to reorganize their own lives after you die.
Speak with an Agent to Get Specific Answers
Narrow your choices down to two or three companies and contact an agent at each one. Have a list of questions for each person and pay attention to how responsive and knowledgeable they are when answering. Also make note of how easily you were able to get through to a real person.
