Buying a life insurance policy is an important part of your financial plan if you have loved ones who’ll suffer financially if you pass away. Getting life insurance that meets your needs and is affordable can be a challenging process, but with the right guidance, you can be confident that you’re adequately covered at the best price.
We explain the process of getting the coverage you need in eight steps. You’ll know what to expect when applying for life insurance and learn how to determine what’s right for you.
1. Calculate how much life insurance you need
The purpose of life insurance is to cover the financial loss that will occur if you die. Your life insurance coverage amount should provide for your family’s long-term financial needs, including the loss of your income in the event of your death, as well as debts and everyday expenses.
A common rule of thumb is to multiply your annual income by 10 to 15 to get an estimate for your total coverage. If you have multiple life insurance policies, you can count your current coverage toward the total amount you need.
You can use our life insurance calculator to determine exactly how much coverage you need. You can also reach out to a Policygenius expert for help.
Learn more about how to determine how much life insurance you need
2. Decide what type of policy you need
Term life insurance
For most people, term life insurance is the best and most affordable way to provide loved ones with a financial safety net to cover any debts or loss of income. Term life insurance lasts for a set period of time — usually 10 to 30 years — and then expires. It’s designed to provide coverage when you need it the most, such as when you’re raising children or paying off a mortgage.
Permanent life insurance
You might need permanent life insurance if you’re a high-net-worth individual or someone with a dependent who needs lifelong care. Permanent policies, including whole life insurance and universal life insurance, don’t expire and often come with a cash value investment component.
Both features make these types of policies much more expensive than term life insurance. However, permanent life insurance can be a good fit if you have a specific need for long-term coverage, like complex investment or estate planning goals.
Learn more about the different types of life insurance
3. Compare life insurance companies & quotes
You can get a free online life insurance quote with just a few pieces of personal information, such as your location, age, gender, and basic medical history. The easiest way to compare quotes from multiple insurers at the same time is to work with an independent broker. This way, you can select the company that best suits your needs.
If you have unique needs, such as getting life insurance with pre-existing conditions, working with a broker like Policygenius is an easy way to compare your overall options between different insurers.
At Policygenius, our agents are licensed in all 50 states and can walk you through the entire life insurance buying process while offering transparent, unbiased advice. Here are some of our top picks.
The 5 best life insurance companies
Insurer | Policygenius rating | Best for | AM Best rating | |
|---|---|---|---|---|
5.0/5 ★ | No-medical-exam, young adults | A | ||
4.9/5 ★ | Affordability, term life, smokers | A+ | ||
4.9/5 ★ | Whole life | A++ | ||
4.8/5 ★ | Pre-existing conditions | A | ||
4.8/5 ★ | Customer satisfaction | A+ |
Methodology
Why you can trust our picks
Our recommendations are based on internal and external expert analysis, as well as our Policygenius Life Insurance Price Index, which uses real-time data from leading life insurance companies to determine pricing trends. When reviewing a life insurance company, our editorial team uses a proprietary scoring rubric with five factors — price, policy details, financial strength, transparency, and customer experience — to assign an unbiased rating between one and five stars. These ratings are also taken into consideration as part of our company recommendations. We don’t get paid for our reviews.
Our reviews and recommendations can help you find a reliable insurer for your family’s financial protection, but the best life insurance company for you depends on multiple factors. A licensed agent at Policygenius can support you during the application process to ensure you get the right coverage for your circumstances at the most competitive price.
4. Decide how you want to shop for life insurance
There are many ways to buy life insurance — but the two best and easiest ways are through an independent broker or an affiliated agent with a specific insurer.
Independent brokers like Policygenius are not affiliated with any insurer and sell policies from multiple companies. Their agents work on your behalf, and can shop around for alternatives if your original application results in a higher premium than you were quoted or is declined.
Affiliated agents, also called captive agents, are hired by one or more insurers to sell their products. Affiliated agents know their company’s offerings and application processing times very well, but your options will be limited because agents only sell policies from the insurers they work for. And because their pay includes commission, agents may have a financial incentive to sell you more expensive policies or more coverage than you need.
In recent years, online shopping for insurance has become more popular, too. According to a study conducted by LIMRA and Life Happens, a non-profit organization dedicated to educating consumers on life insurance, 38% of Gen Z adults and 27% of Millennials say they would prefer to buy life insurance online. [1] Brokers like Policygenius combine a seamless online experience with human expertise from agents who work for you.
5. Complete the application process
Answer questions on your life insurance application
Most questions you’ll be asked during your life insurance phone interview fall into three general categories: basic information, personal and family health, and lifestyle, habits, and hobbies.
Types of life insurance application questions
Basic information
You’ll provide your age, height, and weight to get your initial quote. Next, you’ll speak with a life insurance agent over the phone and they’ll ask you the following questions to confirm your personal information: .
What is your Social Security number (SSN) or Individual Taxpayer Identification Number (ITIN)?
What is your driver’s license number?
Do you take any medications?
Personal & family health
Insurers will evaluate your medical history and family background to assess your insurance risk. Typically, the more health conditions you have and the more complex they are, the more you’ll pay in life insurance premiums. Insurance companies evaluate your family health history, too, because it can provide insight into whether or not you might develop a health condition in the future.
When you’re filling out your online application, you’ll be asked if you’ve been treated for or have taken any medication for health conditions such as asthma, cancer, cardiovascular disease, depression, diabetes, sleep apnea, or stroke.
Once you’re on the phone with an agent, they’ll ask you to provide more information about the following:
Previous and current medical diagnoses
Past surgeries
Family medical history
Lifestyle, habits & hobbies
If you have a high-risk job or hobby, it could impact your life insurance rates, too. If you only partake in these activities infrequently, your premiums might not be affected at all. In other cases, insurers may add exclusions to your policy to offset the risk. An exclusion to your policy could mean that if you die while participating in a risky activity, your beneficiaries won’t receive the payout. Below are some of the lifestyle choices insurers may ask you about:
Risky hobbies, like skydiving or rock climbing
Hazardous occupations, such as firefighting
Choose a beneficiary
On your application, you’ll need to name your policy’s beneficiaries — they’re the people who will receive the payout if you die.
The person you list as your policy’s beneficiary should be someone that would be financially impacted by your death. This is usually a spouse or partner — but can be another trusted adult. If you have children, it’s best practice to list their legal guardian as the beneficiary and set up a trust, instead of naming them directly. Life insurance proceeds can’t be paid out to minors.
Provide additional documents
During the application process, you may be asked to verify the following information. Insurance companies don’t always request these documents, but having them accessible can help move the process along seamlessly.
Proof of identity, citizenship, and age. A driver’s license, Social Security Number (SSN), birth certificate, or a valid passport will work. Non-U.S. citizens can use their green card (permanent resident card), visa, or an employment authorization card.
Proof of income. You can use pay stubs, a letter of employment, a tax return, or an earnings statement from your bank. If you’re unemployed, an unemployment letter or monthly statement describing your unemployment benefits will work. You’ll also want to know an updated estimate of your net worth.
Proof of residency. For renters, that could be your signed lease or a rent receipt. For homeowners, your mortgage bill or a property tax statement will suffice. Insurers will also accept a utility bill or a postmarked envelope with your return address on it.
When you complete your application, you’ll receive an initial quote for your coverage. You’re still not buying the policy yet — the insurance company will review your information first.
Additionally, the quote you receive might differ from the final rate you’re offered. Insurers confirm how much you’ll actually pay for premiums after they review your application.
The quote usually only differs from the offer if new information is revealed when the insurance company reviews your application. This is one reason it’s important to be honest and thorough when you initially apply for life insurance.
What happens if you lie on your life insurance application?
Intentionally lying on your application is considered life insurance fraud and will likely result in your application being turned down.
Not only will you be ineligible for coverage from the insurer you applied to, but any future applications will also note a history of insurance fraud through the Medical Information Bureau (MIB), which can jeopardize getting approved for life insurance coverage or paying affordable premiums.
Call us at 1-800-608-2192 to connect with a Policygenius agent and get started on your application, or follow the link below.
6. Get a medical exam
Some applications will require an in-person medical exam — a free exam similar to a yearly physical, with an option for the medical examiner to come to your home or office. The appointment will last about 30 minutes, during which the examiner will measure your height, weight, and blood pressure and take a blood and urine sample. Your examiner may ask for additional information about your medical history. [2] When applying through Policygenius, we help schedule your medical exam for you.
If you opt for a no-exam life insurance policy, the insurer will verify your application against your medical history instead (you’ll need to sign a HIPAA compliance waiver to give them access to your records).
Insurers use your medical information to help assign you a health classification, also called a risk classification. Your health classification helps determine your premiums.
Learn more about the history of life insurance
7. Wait for approval
Life insurance companies evaluate the risk of insuring you and how much you’ll pay for your policy through a process called underwriting. During underwriting, your insurer will evaluate your overall risk based on your gender, age, health history, and lifestyle. Based on this evaluation, the insurer will determine how much your coverage will cost.
This waiting period can take four to six weeks, but sometimes longer if parts of your application require more documentation. For example, the insurance company may request an attending physician statement (APS) from your doctor, which provides additional information about your health.
Your application can be either:
Approved as applied at the rate you applied for. This means your final offer will be the same as your original quote.
Approved better than applied at a rate cheaper than what you applied for.
Approved other than applied at a rate that is more expensive than your original quote, based on review of your medical records.
When you get your offer, you’ll know exactly how much your premiums will cost — and you can always request to adjust your coverage amount based on the final offer price.
Working with an independent broker like Policygenius can help you shop around to make sure you’re getting the best offer possible, even if you’re originally approved other than applied.
Learn more about life insurance rates
8. Review & buy your policy
Once the underwriting process is complete, you’ll be issued a policy offer. If you agree to its terms, all that’s left is to sign the policy documents and pay your first premium. Your policy doesn’t go into effect until you complete this step.
Depending on the insurer, your policy documents will either need to be electronically delivered or mailed back. Keep a hard copy and digital copy of your policy in a safe place and let your beneficiaries know where to find it.
