What Is Life Insurance And Where Can I Get It From?

A life insurance policy is a contract between an individual, called the Life Assured, and an insurance company. Here, the company promises to pay a certain sum of money to the individual’s family in case he/she were to pass away during the agreed-upon policy period. The Life Assured, in turn, is required to make regular premium payments to the company for a certain number of years. Some life insurance policies also pay out a maturity amount at the end of the policy term in case of survival of the Life Assured.

Where Do I Get Life Insurance?

Of course, you also have to decide where to buy it. In general, there are three places to get life insurance:

Buying Directly From a Life Insurance Company

If you want to go directly through an insurance company, then you can generally buy a direct term policy. This type of policy fulfills your insurance needs for a specific amount of time—such as 10, 20, or 30 years. To buy this type of policy, you typically fill out an online application, review your price quotes, choose a policy, and pay. Depending on the company, you may have an option to buy a guaranteed issue policy that doesn’t require a medical test. A guaranteed issue policy can be a good option for people who might otherwise have trouble buying life insurance because of health issues.

Opting for a direct term policy is a quick way to buy coverage, especially if you know the exact type of coverage that you want (and it happens to be something that the company offers). However, if you need any guidance, have questions, or want more options, then you’re probably better off going through an agent or broker.

Buying Through a Life Insurance Agent

Agents and brokers sell most life insurance policies. Both act as intermediaries between insurance companies and insurance buyers. And both must have the appropriate licenses to sell insurance products in the states where they operate. However, while people often use the two titles interchangeably, there are some distinct differences.

The most significant difference is who the person represents. An agent is appointed by an insurance company to sell its products. An agent who represents one insurance company is called a captive agent, while one who is affiliated with several companies is called an independent agent. Life insurance agents represent companies, not buyers. Their goal is to sell you coverage from the companies that they represent—which may or may not be exactly what you need.

Buying Through a Life Insurance Broker

Brokers, on the other hand, represent insurance buyers—not companies. They work independently and don’t have contracts with any specific insurance companies. That means they should be able to make unbiased recommendations that suit each customer’s needs. Typically, brokers work with a wide variety of insurance companies to provide customers with a selection of price quotes and plans.

A local insurance agent or broker is a good option if you want personalized advice, are considering permanent life insurance rather than term life, or have a complicated situation. Also, an agent or broker can be a good choice for those who are not very tech-savvy and would have trouble trying to navigate an online application. Alternatively, if you have a general idea of your coverage needs, want a term life policy, or prefer to shop without help, then an online agent or broker may be a good fit. There are also numerous quote comparison websites that can get you prices from multiple insurance companies.

Conclusion

Some insurers, for instance, have shifted to evaluating medical records, prescription history, and the like—as opposed to sending a paramedical professional to your home or office to see you. Others have extended the time frame for completing a traditional exam, while providing temporary, interim coverage. You can also connect with agents via phone or videoconference and sign any documents electronically.

Also Read: How To Use Term Life Insurance