Buying life insurance is almost never an enjoyable process.
First you have to figure out whether you need life insurance at all, how much you need, and what type you should get.
Then you need to figure out which insurance company to go through, submit an application, maybe do a phone interview, have a medical exam, wait a few months while the insurance company reviews everything, answer questions that come up, and finally, hopefully, get an offer you can live with.
It’s a long and painful process. There’s no way to sugarcoat it.
But if you have young kids, life insurance is one of the best ways to protect their financial future. Because if anything ever happens to you, life insurance will ensure that your kids have the financial resources they need until they’re old enough to provide for themselves.
So, how can you get good life insurance at a reasonable price with as little hassle as possible? Here are five ways.
1. Through work
Many companies offer life insurance as an employee benefit. Usually you get a certain amount of coverage for free with the option to buy more, and sometimes you can buy it for your spouse as well.
One of the biggest benefits of getting life insurance through work is that it’s easy. It’s usually as simple as deciding how much coverage you want, subject to whatever limits your employer has, and that’s it. It’s much, much easier to get than buying it on your own.
And if you have a pre-existing medical condition, getting life insurance through work may be your only choice, or at least your only affordable one. Since there’s no medical exam, you’re guaranteed a reasonable premium that you may not be able to get on your own.
There are some downsides though.
One is that you may be limited in the amount of coverage you can get and it may not be enough. The other big one is that you often can’t take the coverage with you if you leave the job, and your employer could also simply decide to stop providing the coverage.
It can also be more expensive than individual life insurance if you’re in good health, especially as you age.
Basically, life insurance through work is often convenient, but it’s often not as secure or comprehensive as getting it on your own.
2. Independent insurance broker
If you decide to get additional life insurance beyond what’s offered at work, which is usually a good idea, an independent insurance broker can be a huge help.
A good broker will do a few things for you:
Help you decide how much life insurance you need.
Help you find the best price with the right insurance company based on your coverage needs and your medical history.
Guide you through the entire application process and help you navigate any obstacles that come up.
All of that can make the process a lot easier. The drawback is that it can be hard to find a broker who is genuinely focused on finding you the best policy at the best price, rather than selling you as much life insurance as possible in order to earn himself a bigger commission.
You can start by Googling “independent life insurance broker” + your city/state and calling a few of them. Ask them what types of clients they typically work with, what the process looks like, what criteria they use to make recommendations, and anything else that’s relevant to your situation.
Trust your gut as you go through this process and make sure to double-check their recommendations at every point along the way. If anything doesn’t feel trustworthy, don’t be afraid to bail.
But if you do find a good broker who is genuinely on your side, it can be a big help.
3. Online insurance broker
The internet! It’s a thing!
A number of online insurance brokers have been popping up recently and some of them are going a good job of making the process just a little bit easier.
My favorite so far (and no, I’m not paid to recommend any of these people), is PolicyGenius. They’re independent, it’s an easy site to navigate, and they help you through the entire process. I’ve also had the chance to meet a few of their top people and I feel like they genuinely care about helping their customers.
The big benefit of using an online broker is convenience. You can at least start the process online and these companies are doing everything they can to digitize the process as much as possible. You still have to go through the hassle of dealing with the insurance company, but everything is getting just a little more streamlined.
The downside is that there’s less of a personal touch, though they do have people who can answer questions. And unlike other services that have been taken online, like investing, there isn’t any inherent cost savings. The same life insurance policy from the same company is generally going to cost the same no matter where you get it.
4. Directly through the insurance company
Of course, you don’t have to go through a broker to get life insurance. You can go directly through the insurance company.
That’s what my wife and I did. We figured out how much life insurance we needed and then we used the quote engine term4sale to figure out which company offered that coverage at the best price. Then we simply went to that insurance company’s site and started the process.
With that said, I wouldn’t really recommend doing it this way. There’s no real benefit over using an online insurance broker, and the big downside is that there’s no one to help you navigate the process, answer questions, or re-evaluate if any obstacles come up (like questions about your medical history that significantly change the quoted price).
5. Financial planner
For truly personalized guidance the whole way through, a fee-only financial planner can be a good option for two big reasons:
They’ll help you figure out your life insurance need in the context of your entire financial situation, meaning they can better tailor their recommendation since they’re also working with you on your other financial goals.
Because they’re fee-only, and therefore don’t earn commissions for selling financial products, they won’t have an incentive to recommend any more insurance than you actually need. You’re more likely to get objective advice that’s truly best for your personal situation.
One downside is that it will likely cost you more than the other options, since you’ll be paying for the advice on top of paying for the insurance policy (though a good financial planner is worth more than the cost).
Another downside is that fee-only financial planners don’t sell insurance, which removes a conflict of interest but also means you still have to get a policy in place once you’ve gotten the recommendation. I have an independent insurance broker I use with my clients to solve this problem and make it easy, but some fee-only financial planners may not have a solution like that.
So basically, working with a fee-only financial planner can be the best way to get the best advice, but it may cost more and won’t always make it easier to actually get the insurance in place.
How to decide where to get life insurance
With all of those options, how do you know which one is right for you? Here’s quick guide to making the decision:
Take whatever free coverage your company offers.
If your medical history would make it difficult or expensive to get individual life insurance, getting the rest of your coverage through your employer is probably a good idea (assuming you can do that).
If it’s open enrollment time and you don’t have life insurance elsewhere yet, consider getting additional coverage through work even if you’re healthy just to make sure you have something in place.
No matter what, run some quotes using a site like PolicyGenius or term4sale to see what it might cost to get insurance on your own.
If you have a complicated medical history, consider working with an independent insurance broker or fee-only financial planner who can help you navigate the process.
If you have a clear medical history, an online insurance broker probably offers the most convenience.
If you’re looking for financial guidance across your entire situation, including your life insurance needs, consider working with a financial planner.
So how about you? How have you gotten life insurance and what did you like or dislike about the process? Let us know in the comments below!
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