Buy Life Insurance Online
Here are a few things you should know to buy life insurance online.
First of all, it's good to have an idea of how much life insurance you
really need. A good starting point is to add up all your outstanding debts, set aside another $25,000 for
death related expenses and then you just need to determine how much money you want to leave your
beneficiaries. This can be a lump sum in the case of a business buy out which is relatively simple or it can
be a stream of monthly income for a spouse.
Life Insurance For Providing Monthly Income For A Spouse:
In the case of leaving a residual stream of income to a spouse, you simply use an immediate annuity calculator
to determine how much would be required to fund an immediate annuity to provide a certain
amount of monthly income. For example, my wife is 44 years old. In order to leave her an
annuity income stream of $2500 per month would require $573,000 deposited at today's rates based on her
mortality chart. So in addition to my debts and death expenses I would want an additional $573,000 of
insurance.
Life Insurance For A Business Buyout:
Another major reason people buy life insurance is for a business buyout. In this case, you simply have to
agree with your partner(s) on a reasonable buy out price for your business. Then each partner would purchase
insurance that would allow a surviving spouse to be bought out in case of the death of one of the partners.
Determining The Length Of Insurance Coverage
It doesn't make much sense to buy permanent insurance to cover debts or obligations that you expect to be gone
in 10 or even 20 years. If you have a mortgage that will be paid off in 10 years, you can purchase 10
year level term. If you plan on selling your business in 20 years and retiring you can use 20 year level term
for the buy insurance. It's better to go a little long than to go too short just in case you become
uninsurable during the coverage period. Often times if this is the case, the only resort is to convert
to expensive permanent coverage or pay quickly escilating annual term premiums. So if you plan on
needing insurance for 7 years go the extra 3 for 10 years of coverage instead of saving a few dollars with a 5
year level term.
Why Choose A High Quality Company
People often think that they can go with a lesser quality company when they are buying term insurance since
there is no accumulating cash value. However, this can be a mistake. Things happen like cancer and
heart attacks that cause people to become uninsurable. Nearly all companies offer guaranteed term
conversion where you can convert your term coverage to permanent insurance anytime before the term expires.
If this were ever the case you would be much happier converting to permanent insurance with a high quality insurance company instead of one that could possibly go out
of business. Normally the difference in premiums is not enough to justify choosing a low quality company.
Determining Whether You Want Term or Permanent Coverage
As mentioned above there are many different reasons why people buy life insurance coverage. If you are
buying life insurance for a short term reason such as paying off a mortgage or business related debt then a level
term policy is most likely your best choice. If you are purchasing insurance for estate planning purposes, to
cover burial expenses or to leave an income stream behind then you really should consider permanent
insurance. In most cases you may find that a combination of the two is your best bet. If you have
trouble determining your needs it's best to consult with a qualified insurance agent or financial professional.
How To Buy Life Insurance Online
There are several different Life Insurance Quote engines online, some of the most popular are SelectQuote.com
and MatrixDirect.com
You can also get online life insurance quotes directly from individual companies like State Farm, Geico, Met
Life and most other major insurance companies.
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