The Steps to Getting Life Insurance

When looking into life insurance, it's likely that you will have many questions. You will want to know the benefits of having a policy are, the steps you will need to take to purchase a policy, as well as what the policy will pay for in the future. Buying life insurance is a big commitment and you want to make sure you do it right and get the plan that is right for you and your family. Here is everything you need to know about getting a life insurance policy.

The Benefits

Life insurance policies are a safety net to cover outstanding expenses once you or a loved one passes away. It is a financial investment into the future of your spouse, children, or close relatives. There are many benefits to buying a policy. These include:

• Providing your family with money once you pass
• Covering outstanding medical bills
• Paying off outstanding debt with credit card companies, loan officers, and collectors
• Covering estate taxes
• Paying for funeral costs

Getting a life insurance policy helps ensure that your loved ones will not have a financial burden once you pass. It is a way to make sure that family members are taken care of, even after you are gone. Many individuals with children find this comforting, as it is a way to leave an inheritance to children, grandchildren, and spouses.

How to Get Life Insurance

Many life insurance companies offer free quotes, meaning that you can consult with an insurance broker to determine how much you need to pay into the policy and what the benefits will be before you purchase. Your employer may offer life insurance as part of their benefits plan and can refer you to the proper representative.

Things to Consider before Purchasing a Policy

• How much money will you need to leave behind to cover outstanding costs
• How much money you wish to leave loved ones
• Take into account any loans on which you are a co-signee that will have a remaining balance

Documents You Will Need

You will need the documents below to obtain a life insurance policy:

• Driver's license
• Birth certificate
• Social Security Card
• Passport or green card
• Proof of income (tax returns, pay statements, bank statements, etc.)
• Proof of residency, such as a lease agreement or a mortgage bill

Next Steps

Next, you will have to complete a process of formalities. You may have to undergo a health evaluation and sign legal release papers so that the insurance company can view the results. Some policies do not require this.

After the insurance company approves you for a policy you will have a waiting period. An underwriter for the insurance company reviews all of your information, including your medical records if necessary. The underwriter will confirm your payment rate and provide you with your final cost.

Once this process is complete all you need to do is sign the policy and submit your payment. You may get to decide whether you pay your insurance premium on a monthly or yearly basis and you will name your beneficiaries (those who will receive payment after you have passed).

Submit the signed paperwork back to the insurance company, and inform your beneficiaries of the records. Provide them with contact information for the insurance company so that they can redeem the money as smoothly as possible when it is needed.

Does Life Insurance Cover Funeral Costs?

Funerals often cost thousands of dollars, which is a hefty financial burden to leave behind. Many life insurance policies take this into account and allow you to set aside money to help cover at least a portion of these costs. 

It's important to note that the policy should state your beneficiaries receive the payment immediately upon death so that they do not have to wait for reimbursement for funeral costs. 

If your concern is that your life insurance policy will not release payment to your beneficiaries on time to cover funeral costs in advance, pre-planning and pre-funding your funeral services is the best route to take.

The Benefits of Pre-Planning

When you pre-plan funeral arrangements, not only do you assure that loved ones will not have to wait for a life insurance policy to pay out, but you also get to ensure that all your final wishes are met. 

You can pre-select your final resting place, determine whether you wish to have a traditional burial or cremation, and even select details of your service such as flowers, music, and speakers. It can help provide clarity to your loved ones during their time of grief. They can be certain that they are upholding your wishes and you can have total peace of mind.

The Bottom Line on Life Insurance

When it comes down to it, life insurance is a positive investment. You will be able to continue providing for your loved ones financially after you pass, ensuring that they are not left to cover any outstanding costs or debts. Leaving an inheritance behind also offers great comfort to some.

You are never too young to buy a life insurance policy. In fact, the younger you are when you purchase the better rates you may be. Some policies offer a plan that ensures your rate will never increase based on your age or physical health. 

With a good life insurance policy, you leave your loved ones in good hands.