- 1). Evaluate your need for life insurance by considering the needs of the people who are financially dependent on you and the length of time you anticipate them continuing to rely on you for their well-being. Give thought to the goals that your dependents may not be able to achieve without you being alive to provide financial support, such as earning a college degree or purchasing a home. Estimate the amount of your income that your dependents would need to replace to satisfy their needs if you died and multiply the amount by the number of years you expect them to rely on your ability to provide for them. Add the amount you would reasonably contribute toward their goals to determine the approximate minimum amount of life insurance you need.
- 2). Identify the length of time you will need to maintain an insurance policy. Whether you buy a permanent, cash value policy or a term contract will depend in part on how long you intend to keep the policy in force.
- 3). Contact an experienced, licensed insurance agent or broker. An insurance agent will help you identify the amount of insurance you need and how long you will need it if you are unable to do so on your own.
- 4). Examine your current budget. Figure out how much you can afford to pay for insurance before beginning to solicit quotes for a policy. Be realistic about what you can comfortably pay on a monthly, quarterly or annual basis and only pursue a policy that is within your means.
- 5). Collect quotes from different insurance carriers either by working with an insurance agent or by using a credible website that pulls quotes from multiple insurance companies. Because carriers enforce their own underwriting criteria, gathering and reviewing multiple quotes will increase your chances of purchasing the highest level coverage at the most reasonable cost.
- 6). Complete an application for a life insurance policy. Be honest and reveal any health problems you have sought treatment for in the past or any genetic conditions that have become apparent in your family’s history. Submit to the medical exam your insurance carrier will likely schedule for you.
- 7). Identify the beneficiaries of your life insurance policy. Include at least two levels of beneficiaries on your insurance application, primary and contingent; your carrier will list them in your contract once the company agrees to insure you. If you identified a minor as one of your beneficiaries, consider establishing a trust to receive funds disbursed by your carrier for the child’s benefit when you die. A carrier will typically refuse to release an insurance payment to a minor.
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