Buying life insurance online offers prospective policyholders a lot of convenience. You don’t have to travel to insurance companies, allowing you to find a policy from the comfort of your home . Plus, online marketplaces save you even more time by gathering multiple quotes from across the web in one search.
However, it can also feel unsafe to look for life insurance online. You don’t want to pay unfairly high premiums for coverage or fall victim to scams. But fortunately, buying life insurance online can be safe if you follow some best practices. This article will show you how buying life insurance online can be safe, then dive into a few steps for getting a policy safely.
Can I get life insurance online safely?
Any financial product sold online can attract shady businesses and scams. Life insurance is no exception. But buying life insurance online can be secure as long as you shop with safe and legitimate insurance companies. Finding these companies requires a little extra work, but can give you peace of mind knowing that you’re working with a reputable company.
How to safely buy life insurance online
Here are a few tips to buy life insurance online safely:
1. Determine your coverage and policy needs
First, it’s important to know what kind of life insurance policy you want and how much coverage you should get. Many recommend that you get a death benefit worth at least 10 times your salary. Larger families and people with more debts and expenses might consider getting more.
As for policy type, there are a few kinds to choose from. Term life insurance lasts for fixed terms of up to 30 years, depending on your preferences. You must renew coverage if you outlive the policy, but premiums tend to be affordable. Term life insurance can work well for budget-conscious policyholders with simpler financial needs.
Whole life insurance charges higher premiums but will cover you for life. These policies also come with cash value growth components. Part of the premiums you pay go into this component, which then grows tax-deferred at a fixed rate. Once it’s large enough, you can withdraw from it or borrow against it at good rates and terms. Additionally, you get the full amount minus surrender charges if you decide to surrender the policy.
Universal life insurance policies offer many of the same features and lifelong coverage as whole life insurance. However, you can adjust your premiums and death benefit. You can also pay some of your premiums with the cash value once it grows large enough.
2. Research life insurers
Researching life insurance providers can help you determine which ones are legitimate. Here are some indicators that a life insurance provider may not be legitimate:
- The company or agent is not licensed in your state — you can check licensure at the NAIC’s website.
- The company has poor ratings on sites like TrustPilot and Google Reviews.
- They offer to sell someone else’s policy to you.
- Their sales reps are extremely aggressive or pushy.
- They try to sell you coverage you can’t afford.
- You receive an unsolicited, dubious email about a policy.
- An insurance agent asks you to pay them in their name.
After screening out illegitimate insurers, researching providers can help you gather quotes from legitimate companies and compare them to find the best rates.
The bottom line
Shopping online for any financial product, including life insurance, can create the risk of running into scams. But by taking a few precautions, you can avoid those scams and find quotes from great life insurance companies.
You should start by determining what policy type you want and how much coverage you need. Knowing these can help you stand firm in case an insurer aggressively tries to sell insurance you don’t need or can’t afford.
After that, know the signs of a potential scam and evaluate every provider you come across with those signs. This will help you find legitimate companies and lock in better rates through comparison shopping. Following these precautions can help you feel more confident when shopping online for life insurance.
