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Home › Articles › Life Insurance › Buying Life Insurance

Buying Life Insurance

Where to Start and What to Look For

By Katherine Bontrager

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Finding the Right Insurance
Part of this process entails finding a trustworthy agent and company to provide you with the coverage you need. But where to start? Begin by talking to people you trust and ask for referrals from trusted advisors.

The Life and Health Insurance Foundation for Education (LIFE), a nonprofit organization dedicated to informing the public about the role of life and health insurance, advises looking at an agent's industry credentials, education and training. Professional designations, such as Chartered Life Underwriter (CLU), Chartered Financial Consultant (ChFC) and Certified Financial Planner (CFP), indicate that the agent has completed advanced training and is serious about professional development.

Another good step is finding out about professional memberships. Members of the National Association of Insurance and Financial Advisors (NAIFA) must adhere to a stringent code of ethics.

And first-time buyers should be sure they're purchasing from a quality insurance carrier that is rated at an "A" or higher. There are several insurance-carrier-rating services, but one of the most reputable is Best's Review at www.bestreview.com.

Applying for Life Insurance
"The application for coverage will ask about medical history and should be answered carefully and honestly to be sure coverage will be provided," Graves says. "The application will have fine print granting the life insurance company permission to seek additional information from physicians and credit bureaus. This inormation will be used to cross check and verify the responses in the application. And most likely the applicant will have to provide urine and blood samples to a paramedic as part of the evaluation process."

Be vigilant about your honesty here. Incorrect information supplied on the application can give the insurance company the right to cancel the coverage during the first two years of the policy, Graves says.


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