Life Insurance Shopping Guide: 9 Essential Steps To Find Your Perfect Policy

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Shopping for life insurance involves evaluating your life insurance coverage needs, comparing policies from multiple insurers to find a policy that provides the coverage you need at an appropriate cost and going through the application process including filling out questionnaires or undergoing medical examinations as necessary.

Read below to learn more about how to shop for life insurance including when you should get life insurance and what qualities you should look for in a life insurance company.

Key Takeaways

  • Factors to pay attention to as you shop for life insurance include the policy’s details and restrictions, the company’s customer satisfaction and financial strength ratings and whether the company offers any discounts or riders that may apply to you.
  • It’s recommended that you buy life insurance with a death benefit that is 10 to 30 times your salary if you have dependents relying on your income but exact coverage needs vary from person to person.
  • Term life insurance provides coverage for a limited amount of time at a lower price, while permanent life insurance provides coverage lasting your entire life at a higher price.
  • You will generally need to undergo a medical exam to get approved for life insurance, although some policies require less intensive underwriting or may not require any medical underwriting at all.

1. Determine Whether You Need Life Insurance

Before you start life insurance shopping, it’s important to determine whether you actually need life insurance. In general, life insurance is a worthwhile investment if you think you will ever have dependents relying on your income. Keep in mind that age is one of the primary factors influencing life insurance rates, so it’s best to buy a policy earlier in life rather than later so you can lock in a lower rate.

That said, not everyone needs life insurance. If you don’t have a spouse or children and don’t plan on ever starting a family, you can likely go without coverage. In addition, wealthy individuals may not need coverage since they may already have enough money saved up to provide for their dependents after they die.

2. Consider How Much Life Insurance You Need

The next step you should take is deciding how big of a death benefit your life insurance policy should provide. Some experts recommend that you buy a policy with a death benefit between 10 and 30 times your current income depending on your age but your needs may differ depending on your circumstances.[1] Consider how many beneficiaries you want to support and what expenses you want to help them cover after you die.

For example, you may opt for a large death benefit if you want your policy to leave an inheritance for your children, help them pay off their student loans or grant a final donation to your favorite charity. Conversely, a smaller death benefit may suffice if you simply want to help your loved ones pay for your final expenses like your funeral and burial.

3. Know What To Look for When Shopping for Life Insurance

While cost and depth of coverage will generally be the most important things to look for in a life insurance policy, there are other factors worth paying attention to. For example, if you want to provide your beneficiaries with a steady stream of money to mimic your paycheck, you could look for a policy that pays in installments rather than paying out a lump sum.

You should also check to see if a policy you are interested in comes with any restrictions. For example, some policies come with a waiting period lasting up to three years, meaning your beneficiaries won’t receive the full death benefit if you die within three years of buying the policy. Meanwhile, some insurers may not pay out a death benefit at all if you die by suicide.[2]

4. Learn What Types of Life Insurance Policies Are Available

There are various types of life insurance to choose from, so it’s worth weighing the pros and cons of each to see which type of coverage makes the most sense given your situation.

Term Life Insurance

Term life insurance provides coverage for a limited window of time, usually lasting up to 30 years.[3] It tends to be cheaper than other types of life insurance since there is no guarantee that you will die during the coverage period, meaning your insurance carrier may be able to collect premiums from you without ever paying out a death benefit.

Term life insurance is generally an affordable option if you want to make sure you can cover certain expenses for your beneficiaries during a specific time frame.

For example, you could buy a 30-year policy to last through the end of your mortgage so your spouse can pay it off after you die. Alternatively, you could get a 20-year policy at age 45 to effectively replace your income for your dependents in case you die before retirement.

Permanent Life Insurance

Permanent life insurance provides coverage for the rest of your life up to age 121.[4] Since it is a given that your life insurance company will have to pay out a death benefit at some point, permanent life insurance requires higher premiums than term life insurance. In addition, these policies accumulate cash value that you may be able to withdraw, borrow, put toward your premium payments or use to raise the death benefit depending on the details of your policy.

The most common type of permanent life insurance is whole life insurance, which has stable premiums and earns cash value at a set rate.[5] Another option is universal life insurance, which allows you to adjust your premiums and death benefit over time. If you buy guaranteed universal life insurance, your policy will also accrue cash value at a set rate.

Conversely, indexed universal life insurance grows cash value at a fluctuating rate based on the performance of a stock market index with limits on how much the policy can gain or lose. Finally, the highest-risk, highest-reward option is variable universal life insurance, which places no cap on the amount of money you can gain and no floor on the amount of money you can lose based on the performance of your underlying investments.

Supplemental Life Insurance

Supplemental life insurance refers to a secondary policy that may be worth considering if your employer-sponsored life insurance does not offer a high enough death benefit. While 60% of civilian workers in the United States receive life insurance coverage through their employers, these group policies typically only provide around $50,000 to $100,000 worth of coverage, which is far below the death benefit recommended by some experts.[6][1]

No-Exam Life Insurance

No-exam life insurance refers to any type of life insurance policy you can obtain without having to undergo a medical examination as part of the underwriting process. This type of policy may be ideal if you need to secure coverage quickly or if you have health conditions that may otherwise disqualify you from receiving coverage. However, no-exam life insurance policies generally provide low death benefits at a high price.

One example of no-exam coverage is simplified issue life insurance, which replaces the medical exam with an unintrusive questionnaire. Another underwriting method is accelerated underwriting, which uses an algorithm to analyze data from outside sources like your medical records and credit report. Finally, guaranteed issue life insurance is available regardless of health status to people within a certain age range set by the insurer, although these policies are often the most expensive and provide the least coverage of any type of life insurance.

types of no-exam life insurance

5. Determine if You’ll Need a Life Insurance Rider

Many life insurance companies offer riders you can add to your policy to enhance your coverage in exchange for paying a higher premium. See the below table for examples of some of the life insurance riders commonly offered by insurers.

Rider Name

Rider Description

Accidental death and dismemberment (AD&D)

An AD&D rider allows you to claim a portion of your death benefit before dying if you lose a limb or are otherwise severely impaired due to an accident

Waiver of premium

If you develop a debilitating disability, you can stop paying your life insurance premiums while still keeping your policy active

Accelerated death benefit

You can claim a portion of your death benefit before dying if you develop a terminal illness, although this may cause your beneficiaries to receive a lower death benefit after you die

Term conversion

This rider lets you convert your term life insurance policy into a whole life insurance policy at the end of the term without undergoing a second medical underwriting process

Return of premium

Some or all of the premiums you paid for term life insurance will be refunded at the end of the term if you don’t die while the policy is active

Child or spouse

With a child or spouse rider, your policy will pay out a small death benefit after your child or spouse dies, allowing you to secure limited coverage for your family members without buying them their own policies

Guaranteed insurability

A guaranteed insurability rider enables you to raise your death benefit at certain points during your policy’s coverage period without undergoing another underwriting process

Long-term care

You may be able to subtract money from your policy’s death benefit and put it toward your long-term care expenses if you become unable to carry out basic daily living activities on your own

6. Choose a Life Insurance Company

Before settling on a life insurance policy, it may be helpful to research the financial strength ratings of various companies to make sure they are well equipped to pay your beneficiaries whenever you die. In addition, Wealthy Woman Finance founder Jennifer Kropf recommends avoiding carriers with a high volume of customer complaints on independent review websites.

“Customer service is so important, especially considering the emotional time you may find yourself in needing to file a claim,” Kropf said in a message to SmartFinancial. “You want a company that has a proven track record of treating customers — and beneficiaries — with compassion.”

When choosing the company you want to buy coverage from, you should also check for special promotions or discounts that you may be eligible for. For example, Protective Life offers lower life insurance rates to Costco members, while American Family policyholders may be able to get a discount on home and auto insurance by bundling them with life insurance.[7][8]

7. Fill Out the Application

Once you’ve found an appropriate policy, you may be able to apply for it online. Be prepared to share personal information like your name, contact information, Social Security Number and driver’s license number. The insurer may also request information it can use to calculate your premiums up front such as your age, sex, height, weight, health status and family medical history along with information about your lifestyle such as whether you smoke or have dangerous hobbies like extreme sports.

During the application process, you’ll also indicate how much coverage you want and what people or organizations you would like to designate as beneficiaries. You may have to provide contact information for your prospective beneficiaries as well.

In some cases, you may have the option to send in an initial premium payment with your application in order to secure temporary coverage in case you die in between submitting the application and being approved for your policy, although this option may not be available if you apply for a life insurance policy that comes with a waiting period.[9]

8. Prepare for a Medical Exam (If Required)

Unless you apply for a no-exam policy, you will have to undergo a medical examination before being approved for life insurance. Life insurance exams typically last between 15 and 45 minutes and the examiner may come to your home or office. You will generally have to fill out a questionnaire and the examiner will perform a physical and may also require an electrocardiogram (EKG), lab work and other tests depending on your circumstances.[10]

Along with your age, your health is one of the primary factors affecting life insurance prices.

As a result, it’s important to prepare for your medical exam and, if you are not currently in good health, consider getting in shape before buying life insurance.

9. Review and Purchase Your Life Insurance Policy

Once you have found the best policy for your needs and have been approved for coverage, you should be able to activate your policy by paying your first premium. Depending on your policy’s requirements, you will have to keep making payments monthly, semiannually or annually to keep your coverage active.

After purchasing your policy, you may be eligible for a free look period depending on your state and insurer, during which you can cancel your policy and receive a refund with no penalty. For example, life insurance companies in North Carolina are required to give you a free look period lasting at least 10 days for new policies and at least 30 days for replacement policies.[11]

If you need help finding coverage, you can use SmartFinancial to receive free life insurance quotes today. Simply fill out our online questionnaire about your coverage needs and budget and we’ll connect you with life insurance agents in your area who can help you compare policies from multiple insurance carriers.

Start Shopping for Life Insurance Today!


Is life insurance required?

Life insurance is not required, although it is recommended if you have any dependents who rely on your income.

When should I start shopping for life insurance?

It’s best to start shopping for life insurance as soon as you think you will need it since younger people pay lower rates for coverage than older people.

Do I need to shop for life insurance if my employer provides it?

Employer-provided life insurance policies typically offer far less than the recommended amount of coverage, so it may be beneficial to buy a separate term or whole life insurance policy to supplement your job-based coverage.[1]


  1. Guardian Life. “Is the Life Insurance You Have Through Work Enough?” Accessed Dec. 28, 2023.
  2. Lincoln Heritage Life Insurance Company. “2023 Guide to Guaranteed Issue Life Insurance.” Accessed Dec. 28, 2023.
  3. Insurance Information Institute. “What Are the Principal Types of Life Insurance?” Accessed Dec. 28, 2023.
  4. Society of Actuaries. “2017 CSO Report,” Page 3. Accessed Dec. 28, 2023.
  5. Insurance Information Institute. “What Are the Different Types of Permanent Life Insurance Policies?” Accessed Dec. 28, 2023.
  6. United States Bureau of Labor Statistics. “Employee Benefits in the United States – March 2023,” Page 15. Accessed Dec. 28, 2023.
  7. Protective Life. “Costco & Protective Life Insurance | Deals for Members.” Accessed Dec. 28, 2023.
  8. American Family Insurance. “Life Insurance Coverages.” Accessed Dec. 28, 2023.
  9. Marquette Law Review. “Life Insurance Conditional Receipts and Judicial Intervention,” Page 2. Accessed Dec. 28, 2023.
  10. Guardian Life. “Life Insurance Exam: What To Expect and How To Prepare.” Accessed Dec. 28, 2023.
  11. North Carolina Department of Insurance. “Applying for Life Insurance.” Accessed Dec. 28, 2023.

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