In this guide
To buy life insurance, you decide whether you need it, estimate how much coverage and for how long, choose a policy type, compare quotes from several insurers, complete the application and underwriting, and review the policy before and after it is issued. The Insurance Information Institute breaks the process into eight steps. The process can take anywhere from minutes to several weeks, depending on the policy and whether an exam is required.
Key takeaways
- Start with the need: who depends on you and for how long. If no one does, you may not need a policy.
- Size the coverage with a needs calculation instead of a shortcut like a salary multiple.
- Prices vary between insurers, so compare quotes for the same amount, term and policy type.
- Answer every application question accurately. Mistakes can affect claims later.
- Tell your beneficiaries about the policy, and review it after major life events.
Step 1: Decide whether you need life insurance
Triple-I says life insurance is useful but not necessary for everyone. It is worth considering if someone depends on your income, if your estate lacks the liquid assets to cover taxes and debts, or if you want to cover funeral costs. Our guide on whether you need life insurance goes through the common situations.
Step 2: Work out how much coverage
Triple-I suggests subtracting the resources your survivors would have, such as Social Security, group life and other assets, from their needs, such as final expenses, debts and income, and warns against relying on a shortcut like a multiple of your salary. Our article on how much life insurance you need explains income multiples, DIME and a full needs analysis. If you are a stay-at-home parent, see life insurance for stay-at-home parents.
Step 3: Choose a policy type
| Type | Basic idea | Often considered when |
|---|---|---|
| Term | Covers a set period; pays only if you die during it; usually lower premiums | Needs are temporary, such as a mortgage or raising children |
| Whole life | Lifelong coverage with fixed premiums and cash value | You want lifelong coverage and can afford higher premiums |
| Universal life | Permanent coverage with a more flexible premium and benefit | You want lifelong coverage with some flexibility; see universal life insurance explained |
| Final expense | Small permanent policy meant for funeral and end-of-life costs | Needs are small; see final expense insurance |
For a side-by-side comparison, read term vs. whole life insurance. If you are considering term, choosing a term length is the next decision.
Step 4: Consider riders
Riders are optional add-ons. Triple-I highlights waiver of premium, which pays premiums if you become disabled, and guaranteed insurability, which lets you increase the death benefit without new proof of good health. Some riders cost extra and some are free. See life insurance riders explained.
Step 5: Shop around and compare quotes
Triple-I notes that quotes can vary significantly between insurers. Comparing several quotes, using the same coverage amount, term and rider choices, is the simplest way to see the spread. Some people use an independent agent, who can quote more than one company, and others buy directly from an insurer or online.
- Compare like with like. Same amount, same length, same health class assumptions.
- Check the insurer's financial strength. Independent rating agencies publish ratings; the insurer will pay claims for decades.
- Confirm licensing. Your state insurance department can verify agents and companies.
- Ask about payment frequency. Triple-I notes that paying annually is often cheaper than installments, which may carry a charge.
Step 6: Apply and go through underwriting
The application asks about your health, family history, medications, lifestyle, finances and sometimes travel and hobbies. Depending on the product, the insurer may also require an exam, review medical records and check databases.
- Be accurate and complete. The application becomes part of the contract.
- Expect an exam for some policies. See the life insurance medical exam. If you would rather skip it, read no-exam life insurance first.
- Understand your health class. Underwriters place you in a rate class, and tobacco use usually moves you into a higher-priced one; see life insurance for smokers and tobacco users.
- Note that age matters. See how age affects life insurance.
Watch out: Do not cancel an existing policy until the new one is approved and in force. The NAIC warns that replacing a policy can be costly and advises comparing the old and new policies carefully first.
Step 7: Review the offer and the policy
- Check the details. Amount, term, premium, riders, beneficiaries and the insured's information.
- Look at the approved rate class. It may differ from the original quote.
- Pay the first premium as instructed, which usually puts coverage in force once the policy is delivered and accepted.
- Use the free look period. States generally require a period after delivery in which you can return a policy for a refund. The length varies by state and policy, and often falls between 10 and 30 days, so check your documents.
Step 8: Name beneficiaries and tell them
Name primary and contingent beneficiaries, and let them know the insurer and where the paperwork is. Triple-I recommends telling beneficiaries about the insurer, where policy papers are kept and what you want done with the benefit. See life insurance beneficiaries and, for the claims side, how to file a life insurance claim.
Tip: Keep a one-page summary with the insurer, policy number, agent contact, coverage amount and beneficiaries where your family can find it, and update it when anything changes.
Review after major life events
Revisit your coverage after marriage, divorce, a new child, a home purchase, a big change in income, or when children become independent. Many people also review every few years.
Frequently asked questions
How long does it take to buy life insurance?
It can take minutes for some no-exam products and several weeks for fully underwritten policies, especially if medical records are needed. Timing depends on the insurer and your situation.
Is it cheaper to buy life insurance through an agent or online?
There is no rule. Prices depend on the insurer, product and your profile. Comparing several quotes, through whichever channel you prefer, is how you see the difference.
Can I buy life insurance on someone else?
Generally only if you have an insurable interest, such as a spouse or a child, and the insured person usually must consent. The NAIC notes that only someone with an insurable interest can buy a policy on your life.
What is a free look period?
It is a window after you receive the policy during which you can cancel and get a refund of premiums. Length depends on state law and the policy.
What documents do I need to apply?
Typically identification, your Social Security number, contact details, medical and prescription information, doctor names and beneficiary details. Requirements differ by insurer.
Sources
- Insurance Information Institute – 8 smart steps for buying life insurance
- Insurance Information Institute – How much life insurance do I need?
- NAIC – Life Insurance (Consumer guide)
- NAIC – Life Insurance (Insurance Topics)
- NAIC – Model law chart: Life insurance disclosure provisions (LI-30)
General information only. This guide explains general concepts and is not insurance, legal or financial advice. Rules and prices vary by state and insurer. Check your policy documents and speak to a licensed insurance professional or your state insurance department about your situation.