How Do You Buy Online Life Insurance

As few as 10 years ago, it was difficult to figure out how to buy life insurance online. Web directories like Yahoo, and search engines like Google and Bing were not nearly as well-known and understood as they are today. And even if the largest and most-respected insurance companies had websites, the sites were primarily for informational purposes, not for selling policies.

Today, however, all of the major, and minor, life insurance companies have well thought-out, easy-to-use websites that allow customers find specific policy information as it relates to their needs. Further, there are a number of online resources that allow customers to compare policies, insurance companies and pricing. And, the policy review and purchase can be completed within a matter of minutes.

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Using the Right Search Terms

The key to understanding how to buy life insurance online is to understand how search engines work. When a search term like, "How do you buy online life insurance" is entered, the search engine scans billions of pages and returns the ones that are most likely to contain the phrase in its entirety. If the phrase is not found, the search engine provides pages that contain all of the words, even if they aren't in the exact order they were in the initial phrase.

In order to get the most relevant information from an online search for life insurance, customers need to enter a phrase or a term that accurately describes what they're looking for. For example, entering "life insurance" as the search term will return about 180,000,000 pages, whereas entering "term life insurance for seniors" will return 17,800,000.  However, entering "term life insurance for seniors in Arizona" will return only 633,000 results. These results will presumably be much closer to what the customer is actually trying to find. In other words, this search phrase should yield life insurance companies that are licensed to sell term life insurance policies in the state of Arizona to people over the age of 62.

Getting an Online Quote for Life Insurance

Once a customer has found the search terms that best reflect what he or she is actually looking for, he or she can choose one of the results to get an online life insurance quote. When requesting a quote for a term life insurance policy, applicants will have to answer the following questions:

  • The state in which he or she resides – Not all insurance companies are authorized to sell all policies in all states
  • Date of birth – All life insurance policies are based on the age of the applicant at the time he or she applies
  • Gender – While it may not seem fair in this day and age, men still typically pay more for life insurance than women do
  • Tobacco and nicotine use – Smokers and other tobacco users will always pay more for life insurance than non-smokers will
  • The length of the desired term – While the length of the term can range between 1 and 30 years, the most common is 20
  • Coverage amount – The coverage amount is the amount of money that the beneficiary will receive upon the death of the policy owner

Some insurance companies will also request information about height, weight and health status. The best health status tier is "preferred", followed by "standard plus" and "standard". The preferred tier is for an applicant whose health status is excellent. For example, he or she has never had a major illness and does not have high blood pressure or any other manageable health concern. If an applicant has had a major illness or is being treated for a chronic condition, he or she will be quoted a standard plus or standard rate. Each life insurance company determines which illnesses determine the tier.

Using an Online Life Insurance Calculator

One of the benefits of buying life insurance online is that premium rates for different term lengths and coverage amounts can be obtained almost instantly. For example, an applicant can quickly determine that changing his or her term length from 15 to 20 years will increase the monthly premium by only a small amount. Or, he or she can see that increasing the coverage amount from $500,000 to $2,000,000 significantly increases the premium.

Determining how much life insurance is actually needed can also be found online. Typically, a needs calculator will require the following information:

  • Amount needed for funeral and burial expenses – Typically between $8,000 and $15,000
  • Amount needed to replace income from remaining earning years – If the applicant is 50 and expect to work until age 65, he or she would enter 15
  • Amount of annual income needed by survivors – How much do the applicant's spouse and children need for day-to-day living expenses to maintain their existing standard of living
  • Amount needed for college – How much will the applicant's children need to complete a college education

Based on the answers the applicant provides to these questions, he or she will be able to determine how much coverage is needed.  Note that some companies will ask for more detailed information in order to provide a more accurate number. There may also be additional expenses or one-time costs that the applicant will want to provide, such as a wedding, new car or down payment on a house.

Compare Online Life Insurance Policies

When looking to buy a life insurance policy online, it's best to look at as many companies and as many policies as possible. While life insurance isn't exactly a commodity, an insurance policy, especially a term life policy, can sometimes be much less expensive at one company than it is at another.  There can be several reasons for this, but if each company has an excellent reputation, a strong credit rating and the financial ability to pay all of its claims on time, it's usually wisest to choose the least expensive policy, unless there's a specific reason the applicant wishes to purchase a more expensive policy.

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