Meet Sophie. She’s is about to become a
first-time mother. She’s very excited. Sophie has watched our first video “Life
Insurance 101”, so she understands the importance of getting life insurance. Unfortunately,
she has no idea where to start. What should she do? Well, her first step is simple: shop around
for the best life insurance plan. To do this, Sophie can either go online and manually get
quotes from insurers, contact a local insurance agent, or use our prefered website to easily
compare insurance quotes from the best providers. Regardless of method, once Sophie selects
a plan, she’ll have to submit an application that provides basic information to the insurer,
such as employment status, proof of income, and a release for the insurer to review her
health records. After that, an insurance representative will
contact her to schedule two things: a phone interview and paramedical exam. During the phone interview, the representative
will typically ask Sophie questions about her hobbies, lifestyle, and health history.
During the paramedical exam, which generally takes place either at home or at work, a trained
medical professional will take Sophie’s basic vital signs, as well as a blood and
urine sample. Once those two tasks are completed, assuming
that everything else is in order, an insurance underwriter will look at Sophie’s application
and approve her. Now that Sophie understands how life insurance
works, and how to get it, as long as she follows these six rules, she should be set for the
future. Rule 1: Determine if life insurance is really
necessarily. Unless you have a dependent, you really don’t need it.
Rule 2: Don’t get permanent life insurance, whether it’s whole, universal and variable.
Instead, get “level premium” term life insurance, which is far cheaper and gives
you a locked-in premium for the rest of your term. For more details, be sure to check out
first video “Life Insurance 101”. Rule 3: As a rule of thumb, target policies
worth at least five to ten times your income, and consider insuring your spouse. For a more
exact calculation of your family’s insurance needs, be sure to check out our recommended
calculator. Rule 4: Read the fine print of any life insurance
plan you are considering, don’t just pick the one with the lowest premium.
Rule 5: Only get life insurance from reputable providers with excellent credit ratings. If
that sounds confusing to you, don’t worry, our recommended website does this screening
process for you. Rule 6, the final rule: Once covered, be sure
to teach beneficiaries of your policy how to file a claim. That way, in the event of
your death, your family knows how to get the death payout. Congratulations! You have finished the life
insurance basics curriculum! If you want to see our free recommendations for life insurance
plans, or just check out more educational material, be sure to check out our website!