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10 Need-to-Know Tips for Buying Life Insurance
10 Need-to-Know Tips for Buying Life Insurance
June 02, 2022 / Katy Ward
10 Need-to-Know Tips for Buying Life Insurance
June 02, 2022 / Katy Ward


We buy insurance to protect our mobile phones, our holidays, and even our pets. Worryingly, however, many Americans are less keen to insure their most valuable asset: their lives. In fact, figures from Statistica reveal that just 52% of the US population has life insurance in place.

Without coverage, your family could face financial devastation should you pass away and your income suddenly vanish. In a worst-case scenario, your loved ones may struggle to keep up with mortgage repayments or cover the cost of college tuition.

But while there’s no denying these policies can be invaluable, finding the best life insurance for your needs can be tricky, especially if you’re new to this market. Here, we give our top 10 tips for choosing the best policy for you and your loved ones.

    1. Decide on the type of policy you need

Before you begin shopping for life insurance, the first step is to determine which type of policy is right for you.

Life insurance plans typically fall into 2 categories: term and whole life. As the name suggests, term life insurance covers you for a predetermined number of years (typically 10, 15, 20, 25, or 30) and is designed to pay out if you pass away during this period. These policies are most suitable for those who need to cover specific expenses during a certain timeframe, such as repaying a mortgage or sending children to college.

Conversely, whole life plans provide permanent death coverage, regardless of when you pass away. Most whole life policies also include a cash component, which you can borrow against before you pass away.

2. Consider how much coverage you need

Determining the right amount of life insurance to buy is an immensely personal decision as no two people have identical financial commitments. If, for example, you are the sole provider in your family and have an expensive mortgage or significant debts, it would be wise to buy a large enough policy to cover these costs should you pass away.

If, however, you’re single and without any debts, your family is unlikely to need a large payout after you’re gone. They may, in fact, need just enough to cover your funeral expenses. In these circumstances, you may not need life insurance at all and could consider leaving a sufficient amount in savings to cover such expenses.

3. Don’t put off getting coverage

While life insurance may be one of the last things on your mind when you’re in the first flush of youth, this may be the prime time to buy a policy.

When calculating the cost of your insurance, companies will look at 2 factors: your health and your age. For the majority of people, it goes without saying that the younger and fitter you are, the less likely you are to pass away. Thus, insurers will charge a lower rate for your insurance to reflect the decreased likelihood that they will need to pay out.

4. Remember to shop around

When you’re searching for life insurance quotes, it makes sense to cast as wide a net as possible. One approach is to enter your details into various providers’ online quote tools or to visit a price comparison site.

If you’d prefer the reassurance of working with a professional, you can consult an independent broker. Having extensive experience in their field, these individuals are well-placed to know which providers will offer affordable life insurance for people of your age and with your lifestyle.

A word of warning: although buying the cheapest life insurance may save you money in the short term, it could prove a false economy, and you should always choose a policy that will provide your family with sufficient funds after you’re gone.

5. Be prepared to answer plenty of questions

When it comes to life insurance, determining a person’s life expectancy is a numbers game. To calculate how likely you are to pass away in the near future, life insurance companies will ask for in-depth information about your medical history, your immediate family’s medical history, and your lifestyle. They will, for example, need to know whether you smoke, drink alcohol, or take part in dangerous sports. This process is known as underwriting and will determine the cost of your premiums.

Many companies will also require you to submit to an in-person medical examination before you can take out a policy. As part of this process, the examiner may ask for further details about your medical history, as well as check your heart rate and blood pressure.

6. Be honest on your application

Although you may be tempted to bend the truth when applying for life insurance so you can secure more competitive rates, doing so could be a costly mistake. If you take part in any activity that could endanger your health or even your life, you’ll need to be truthful about these habits during the application process.

Should the worst happen and your insurance provider discovers that you were dishonest in your application, it may invalidate your policy and your family could be left without a payout.

7. Consider adding riders to your policy

If you believe that standard life insurance policies aren’t sufficient to meet your needs, you could consider adding riders to customize your plan. These are additional benefits that can provide you with enhanced coverage.

Common examples include:

  • Long-term care rider: pays toward the cost of nursing home fees should you become ill
  • Family income benefit rider: provides regular income to your beneficiaries
  • Waiver of premium rider: covers the cost of future premiums if you are unable to work through illness or injury
  • Accelerated death benefit rider: allows you to receive a portion of your death benefit if you are diagnosed with a terminal illness

8. Read (and re-read) the fine print

If you’re buying life insurance, your top consideration is likely to be safeguarding your loved ones from unnecessary financial—and emotional—hardship after you’re gone. It’s therefore essential that you go through the fine print on your policy with a fine-tooth comb to avoid any nasty surprises for your beneficiaries after you pass away.

You may, for instance, want to check for any exclusions relating to deaths that occur during the initial period of a policy or whether your coverage extends to deaths that occur while performing an extreme activity.

9. Re-evaluate your policy if your life changes

With marriage, the birth of children, new jobs, and divorces, life is full of change. All these major life events can bring additional financial responsibilities, which may mean you need to reassess your life insurance needs.

Depending on the nature of this change, you may need to make adjustments to your coverage such as buying additional protection, changing your beneficiary, or even cashing out your policy.

Although there are no hard-and-fast rules, it would make sense to review your life insurance every year as part of an annual financial health check.

10. Keep up with your payments

Finally, it’s important to remember that all your hard work in choosing the right policy is likely to go to waste if you fall behind with your premiums. If you were to pass away while you were delinquent on your policy, your insurance company could determine that your coverage is invalid and refuse to pay out to your beneficiaries. Should you find yourself struggling to make your payments, contact your insurer immediately to discuss your options.

Find the Policy that Fits You Best

So, which is the best life insurance policy? There’s no one-size-fits-all answer. However, there are steps you can take to help ensure you choose the most suitable and cheapest life insurance policy for you and your loved ones. The key is to take an honest look at your circumstances and assess how much coverage you’ll need to meet your obligations regardless of what the future holds.

By Katy Ward
Oxford graduate Katy Ward is a seasoned journalist and editor covering personal finance and software topics for Eleven Writing. Over a 15-year career, Katy has worked with several finance titans, including Barclays, Tandem Bank, and Yahoo! Finance.