Life insurance provides a way to leave money behind for your loved ones when you die. In addition, it can provide various benefits during your lifetime. But who can qualify?
Getting approved will depend on a number of factors, including your health status, finances, lifestyle choices, and more. Here’s a closer look at life insurance as a whole and how to qualify.
What is life insurance?
is a type of insurance cover that pays a death benefit to your chosen beneficiary when you die. It can help cover end-of-life expenses, pay off your debts and provide financial support for your dependents after you die. Additionally, permanent life insurance policies include a cash value component that can act as an investment vehicle and source of funding during your lifetime.
If you don’t currently have life insurance or are unhappy with your current plan, check out your options and compare prices now.
Like most insurance policies, life insurance requires you to choose the amount of coverage you want and pay your premiums to maintain coverage. When you die, your beneficiary can make a claim and receive the death benefit payment. That said, there are different types of life insurance, so it can work differently depending on the plan you choose.
How to qualify for life insurance
When it comes to qualifying for life insurance, providers will assess your life expectancy. Their income comes from premium payments, so they have to calculate how long you will make the payments before they pay the benefit. For, assess the likelihood of having to pay the benefit at all. Common factors considered include applicants:
- Height and weight
- Health conditions
- Family health history
- Driving record
- Criminal history
- Dangerous hobbies
- Lifestyle habits
- Financial information
The longer your estimated life expectancy, the better your chances of getting affordable life insurance coverage. It never hurts to have a backup plan on top of your other income and investments. Start browsing life insurance plans today.
Just note: You may have difficulty getting coverage in certain situations, such as if you have a serious pre-existing health condition, engage in dangerous activities such as skydiving, or are an alcoholic.
How to get life insurance
How do you go about getting life insurance? Here are four steps you should follow.
- Determine your needs
- Shop around
- Register and make a payment
Determine your needs
A good first step is to assess your needs. Thinksuch as:
- Covering your funeral and burial expenses
- Providing financial resources to dependents after your death
- Payment of arrears and taxes
- Leaving behind a tax-free legacy
- Get an investment account that offers tax-free growth
- Creating a source of loan for the future
Then consider whether you need it temporarily or want it for life. From there you can estimatefor every purpose and in total.
With an idea of the type of life insurance you want and the amount of coverage you need, start your search for a provider. Get a free quote in minutes.
Life insurance companies differ in their offerings, qualification requirements, costs, payment options, and more. Your shopping can help you find the best deal. Once you find a few companies that look good, contact them to get quotes. Offers are often based on a few basic questions and give you a great idea of what a company will offer.
After collecting a few quotes, decide which company’s offer is the best and then apply with that insurer. Life insurance applications often include a large set of questions about your health, finances and lifestyle. Insurers may also require you to undergo a medical examination by a licensed physician. Once you’re done, you’ll find out if you qualify and the premium price available to you.
Register and make a payment
If the life insurance policy ends up matching your needs and budget, you can sign the paperwork and make your first payment. While monthly payments are common, you can also typically choose to pay quarterly, semi-annually or annually. You will have coverage under the policy as long as you continue to make your payments on time.
Not only can life insurance help take care of your loved ones after you die, but it can serve as a source of funding and an investment vehicle during your lifetime. Not sure where to start your search for coverage? Here is
What are the different types of life insurance?
Life insurance is not one size fits all. The main types you can choose from include:
- Term life insurance: Term insurance provides temporary coverage for a set period — often 10, 15, 20 or 30 years. If you die during the period, your beneficiary receives the death benefit. If you don’t, no payment is made. Depending on the insurer, you may be able to extend or convert policies when they expire.
- Whole life insurance: Whole life insurance offers permanent cover with fixed premiums, a guaranteed death benefit and a guaranteed rate of return on the cash value component. It remains valid as long as you make the required payments.
- Universal Life Insurance: Universal insurance is also permanent cover with a cash value component. However, premiums are adjustable, cash value is not guaranteed and the death benefit can be flexible. Flexibility can make insurance more affordable throughout your life, but it doesn’t come with the guarantees of whole life insurance.
While term life insurance is often the cheapest option, it only offers coverage for a set period. There is no payment to your beneficiaries if you outlive the policy. Additionally, there is no monetary value element. However, this may be the best route if you want the most affordable coverage for a limited time — like when you’re raising kids and paying a mortgage. Full and universal coverage offer more benefits but have higher costs.