Choosing to buy term life insurance isn't always an easy decision to make. It means facing the possibility that at some point in the future, you may not be around to provide for your family. This simple checklist will help you understand each step of the life insurance application and purchase process so that you can buy your term life insurance policy confidently and quickly, leaving you more time to do what matters most--be with your family!
First, talk to your family
Between discussing the day's work drama, your child’s math test, and tonight's dinner options, it's tough to find time to talk about topics like life insurance with your spouse, partner, or parent. Nevertheless, it's important to have the conversation in advance of a life-changing situation. Not only will you gain peace-of-mind, but so will your family members and other dependants.
Some people also prefer to have a third party involved in the discussion, like a life insurance agent, in order to help answer any questions family members may have. The insurance agent can also help explain how a life insurance policy can provide funds to help care for the needs of dependents, spouses, and children in the event of an unforeseen tragedy.
Determine a policy effective date
After you've talked with your family, look at a calendar and determine the date you would like your policy to become effective. Many insurance companies will allow you to begin your term life insurance policy the same day you complete your application and are approved!
Apart from your personal preferences, what should you be considering when choosing an effective date for your policy? Let's look at some example scenarios!
- A long-distance trucker may want to put off his effective date until he begins his next leg on the road.
- A single mom with a daughter moving home from college may want her policy to become effective as soon as possible, since her daughter doesn't currently have any full-time job prospects.
- A contract laborer may set his policy effective date to the same date he begins work at a new downtown construction site.
The individuals in these three scenarios are either approaching a period of time where they are at increased risk, or a period where family members are more dependant on their income--two situations in which term life insurance could bring important peace of mind.
Calculate the amount of coverage you want
Next, determine the right coverage amount for your needs. Life Happens , a nonprofit organization dedicated to educating the public about insurance planning, suggests calculating the amount by asking yourself the following two questions:
- How much will be needed at death to meet immediate obligations? (uncovered medical bills, funeral costs , or outstanding debts)
- How much future income is needed to sustain the household?
With Direct Auto Insurance, you can choose term life coverage of up to $25,000.
Choose the length of the term
The right term length isn't "one-size-fits-all." You'll want to consider how long it will be until your children are able to provide for themselves, how soon you plan on retiring, and how much time is left on your car or house payment. Direct Auto Insurance offers both 6 and 12 month terms to consider.
In our previous example, the contract laborer may only want a term life policy with a length of six months, as this is how long he'll be working at the job site and how long he feels he could be "at-risk." The single mom, on the other hand, may prefer a policy with a term length of 12 months, as she feels her daughter needs a few months or more to get back on her feet.
Have personal information handy
To save yourself a little time, have the following information ready for the proposed insured, policy owner, and beneficiary: first and last name, date of birth, Social Security number, home phone, and address.
The insurance company will use this information to verify that the applicant, policy owner, and beneficiaries are all real, and also to locate beneficiaries upon death of the insured. Should the unthinkable happen, the insurance company will also use this info to verify the death of the insured using the Social Security Department's records.
Have medical records available to reference
Some insurance companies may require the proposed insured to undergo a medical examination, however, Direct does not require a medical examination--you'll simply be asked to answer a few simple health questions. Gather any documents you may need in order to best answer questions similar to the following for the proposed insured:
- In the last two years, have you ever been diagnosed with, treated for, or been told by a licensed medical profession that you have a disease or disorder of the heart, cancer or tumors, or disease of the kidneys, liver, or stomach?
- During the past twelve months, have you been hospitalized for diabetes, high blood pressure, asthma, or a stomach ulcer?
Decide on a payment method and plan
And the last easy to-do item? Choose your payment method! At Direct, you can pay in full or select from a standard installment plan. If you're worried about the cost of term life insurance, don't worry just yet. According to Life Happens , 86% of people say they haven't bought life insurance because it's too expensive, yet they overestimate its true cost by more than 2x. At Direct, term life insurance costs less than 50 cents a day,* but the benefits to your family are priceless.
Providing your family with financial security is one of the greatest gifts you can give them. Get your free life insurance quote online or give one of our friendly agents a call at 1-877-GO-DIRECT. We're happy to help you talk through the benefits of term life insurance with your loved ones.
Keep Learning About Life Insurance
- Term vs. Permanent Life Insurance
- When to Buy Life Insurance
- 3 Term Life Insurance Mistakes to Avoid
*Commercial auto insurance produced by Right Choice Insurance Agency, Inc. and Direct General Insurance Agency, Inc. d/b/a Direct Auto Insurance as agents for Titan Indemnity Company, a Nationwide Insurance Company & its affiliates. Not available in all stores. Pay plans, discounts and coverages subject to terms and conditions. *Per day amount based on annual premium for insured 18-50 years old with a $15,000 policy. Higher limits available. Individual term life insurance by Direct General Life Insurance Company, Nashville, TN. Policy 58TL02010713. Premium and other terms will vary by state, the insured’s age, and the selected coverage. *Material in these articles is for general information or entertainment purposes only. Direct General does not endorse and is not affiliated with any of the companies or apps listed in this article. Direct General is not responsible or liable for the availability of links to websites or resources, or for any content, advertising, products, services or other materials on or available through these websites or resources. Any references to third party rates or products are subject to change without notice. Trademarks are property of their respective owners.