Life Insurance: HotPads Insurance Center


Shopping for a Policy


Pricing your policy
When you take out a life insurance policy, the insurance company is taking a calculated risk. They want to collect enough money in premiums to cover the cost of your death benefit, and earn a profit. That means that the sooner that you're likely to die, the higher your premiums will be. So they will take into account factors like your age, whether or not you smoke, and your family health history. If you have a habit of ordering umbrella drinks in biker bars, you may not be able to get coverage at all.

Different insurance companies will evaluate your risk levels differently, and have different tolerances for risk. So shop around and get multiple quotes to establish that you're getting a good deal.

Evaluating an insurer
While cost is a factor when shopping for a policy, so is the reputation of your insurer. Your life insurance policy won't do your dependents any good if the cut-rate company that you settled on turns out to be a fly-by-night. Ratings services like Standard & Poor's evaluate the financial strength of insurers and their abilty to pay claims. Look for this information online, and contact your state's insurance commissioner for their company reports.

Submitting an application
When you are ready to apply for a policy, you will submit an application requesting information about your medical history and health habits. Be honest. Misstatements on your application can void your policy, causing you to lose both your premiums paid and death benefit. You may also be required to take a medical exam paid for my the insurer. This can be as simple as a blood test or as intensive as a standard physical.


Keeping Insurance Records


    Notifying your beneficiaries
    Once you've purchased a policy, it's a good idea to let your beneficiaries know that they will be taken care of in the event that something happens to you. Let them know the name and address of the insurer so they'll have contact information at the ready. (You may not want to tell them how big the payout is, lest they have the urge to cut your brake lines.)

    Where to store your policy docs
    Your insurance policy documents are some of your most important financial records. Keep the original forms in a most secure place, like your bank's safety deposit boxes or a fireproof safe in your home. Maintain photocopies in a file cabinet or with a trusted beneficiary. Your attorney may also provide record retention services.


    Additional Information on Life Insurance


      Online Articles

      Check out the following websites for information from experts about life insurance.

      Life insurance from the Insurance Information Institute.

      Types of life insurance explained by InsuranceFinder.com.

      Information from About.com on life insurance and annuities.

      An article from Bankrate.com on life insurance.


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        HotPads, Inc. is not an insurance agency or advisory firm. (Have you not read our About Us page?) Do your homework and make an informed decision before buying any type of insurance policy.