How to Compare Whole Life Insurance Quotes Online: A Checklist of Things to Consider Before You Buy

 Whole life insurance is a type of permanent life insurance that provides coverage for your entire life and also builds cash value over time. Whole life insurance can be a good option for people who want to leave a legacy for their loved ones, create a tax-advantaged savings account, or protect their estate from taxes and creditors. However, whole life insurance is also one of the most expensive types of life insurance you can buy, and it can be complicated to understand and compare.

Buying whole life insurance online can be a convenient and fast way to get coverage, but it also requires careful research and comparison. You need to consider several factors before you choose a policy that matches your needs, goals, budget, and risk tolerance. In this article, we’ll provide you with a checklist of things to consider before buying whole life insurance online. We’ll help you find the best policy for your situation and save money on your premiums.

Checklist Item #1: Determine How Much Coverage You Need

The first thing you need to do before buying whole life insurance online is to determine how much coverage you need. The coverage amount, also known as the death benefit, is the lump sum payment that your beneficiaries will receive when you die. The coverage amount should be enough to cover your final expenses, pay off your debts, replace your income, and support your dependents.

There are different ways to calculate your coverage needs, but one of the simplest methods is to use the DIME formula. DIME stands for:

• Debt: Add up all your outstanding debts, such as mortgage, car loans, student loans, credit cards, etc.
• Income: Multiply your annual income by the number of years you want to replace it for your family.
• Mortgage: Add up the remaining balance of your mortgage or rent payments.
• Education: Estimate the cost of education for your children or spouse.

For example, suppose you have $50,000 in debt, $50,000 in annual income, $200,000 in mortgage balance, and $100,000 in education costs. Using the DIME formula, your coverage need would be:

$50,000 + ($50,000 x 10) + $200,000 + $100,000 = $900,000

This means you would need a whole life insurance policy with a $900,000 death benefit to cover your financial obligations and provide for your family.

Of course, this is just an estimate and you may need more or less coverage depending on your specific situation and goals. You should also adjust your coverage amount over time as your needs and circumstances change. For example, you may need less coverage as you pay off your debts or more coverage as you have more children.

Checklist Item #2: Compare Different Types of Whole Life Insurance Policies

The next thing you need to do before buying whole life insurance online is to compare different types of whole life insurance policies. Not all whole life insurance policies are the same. They may differ in terms of cost, cash value growth, dividend potential, flexibility, etc.

Here are some of the common types of whole life insurance policies available:

• Traditional whole life insurance: This is the most basic and common type of whole life insurance. It has a fixed premium, a fixed death benefit, and a fixed cash value growth rate. The cash value grows at a guaranteed rate of return, usually between 2% to 4%. The premium is locked in for life and will never increase. This type of policy is suitable for people who want stability and certainty in their policy.

• Participating whole life insurance: This is a type of whole life insurance that pays dividends to the policyholders. Dividends are not guaranteed and vary by year and insurer, but they can be a significant source of income and growth for your cash value. You can use your dividends to buy more coverage, reduce your premiums, or receive cash. This type of policy is suitable for people who want to share in the profits of the insurer and have more options in their policy.

• Non-participating whole life insurance: This is a type of whole life insurance that does not pay dividends to the policyholders. Instead, it offers a lower premium or a higher death benefit than a participating policy. The cash value growth rate is usually higher than a traditional policy, but lower than a participating policy. This type of policy is suitable for people who want to save money on their premiums or get more coverage for their money.

• Single premium whole life insurance: This is a type of whole life insurance that requires only one lump sum payment upfront. The premium is usually very high, but it provides immediate coverage and cash value. The cash value grows at a guaranteed rate of return, usually higher than other types of policies. The death benefit is also higher than the premium paid. This type of policy is suitable for people who have a large amount of money to invest and want to avoid paying taxes on their gains.

• Limited pay whole life insurance: This is a type of whole life insurance that requires only a limited number of premium payments, such as 10, 15, or 20 years. After that, the policy is paid up and no more premiums are required. The premium is usually higher than a traditional policy, but lower than a single premium policy. The cash value grows at a guaranteed rate of return, usually higher than a traditional policy. The death benefit is also higher than the total premiums paid. This type of policy is suitable for people who want to pay off their policy quickly and enjoy lifetime coverage.

Checklist Item #3: Compare Different Whole Life Insurance Providers

The third thing you need to do before buying whole life insurance online is to compare different whole life insurance providers. Not all whole life insurance providers are the same. They may differ in terms of financial strength, customer service, reputation, and ratings.

You want to choose a provider that is reliable, reputable, and responsive. You want to make sure that they will pay your claims on time, provide quality service, and maintain their reputation. You also want to check their ratings from independent agencies such as A.M. Best , Standard & Poor’s , Moody’s , or Fitch . These ratings reflect the financial stability and ability of the providers to meet their obligations.

Here are some examples of reputable and reliable whole life insurance providers that offer competitive rates and quality service:

• Progressive Life by eFinancial: Progressive Life by eFinancial is an online platform that allows you to compare and buy whole life insurance policies from top-rated insurers. You can get instant quotes, compare different policies and providers, and apply online in minutes. You can also access licensed agents who can answer your questions and guide you through the process.
• Simply Insurance: Simply Insurance is an online marketplace that offers fast and easy access to whole life insurance policies from leading insurers. You can get instant quotes, compare different policies and providers, and apply online without any medical exams or paperwork. You can also get expert advice from licensed agents who can help you find the best policy for your needs.
• MassMutual: MassMutual is one of the oldest and largest mutual life insurance companies in the U.S. It offers a variety of whole life insurance policies, including traditional, participating, single premium, and limited pay options. It also pays dividends to its participating policyholders. It has an A++ rating from A.M. Best and an A+ rating from BBB .

Checklist Item #4: Compare Different Whole Life Insurance Quotes

The fourth thing you need to do before buying whole life insurance online is to compare different whole life insurance quotes. A quote is an estimate of how much you’ll pay for a certain amount of coverage from a certain provider.

You want to compare different quotes based on the coverage amount, premium amount, cash value growth rate, dividend rate, and fees and charges. You want to find the best balance between cost and benefit, and choose a policy that fits your budget and goals.

You can get accurate and personalized quotes online from multiple providers using online tools such as Progressive Life by eFinancial , Simply Insurance , etc. These tools allow you to enter your basic information, such as age, gender, health, coverage amount, etc., and get instant quotes from different providers. You can also adjust your information and see how it affects your quotes.

You also want to read and understand the policy illustrations and disclosures that accompany the quotes. These documents show you how your policy will perform over time, based on certain assumptions and projections. They also show you the fees and charges that apply to your policy, such as surrender charges, loan interest rates, withdrawal limits, etc.

Checklist Item #5: Compare Different Whole Life Insurance Riders and Options

The fifth and final thing you need to do before buying whole life insurance online is to compare different whole life insurance riders and options. Riders are add-ons or features that enhance your coverage or cash value. Options are choices or preferences that affect your policy terms or conditions.

You want to compare different riders and options based on their cost, benefit amount, eligibility criteria, etc. You want to choose the ones that are useful or necessary for your situation and goals. You also want to avoid the ones that are unnecessary or expensive for your needs.

Here are some of the common riders and options available for whole life insurance policies:

• Waiver of premium rider: This rider waives your premium payments if you become disabled and unable to work for a certain period of time. This can help you keep your policy in force and avoid losing your coverage or cash value.
• Accelerated death benefit rider: This rider allows you to access a portion of your death benefit while you’re still alive if you’re diagnosed with a terminal illness or a chronic condition that requires long-term care. This can help you pay for medical expenses or other needs.
• Guaranteed insurability rider: This rider allows you to increase your coverage amount at certain intervals or life events without having to undergo another medical exam or provide proof of insurability. This can help you keep up with your changing needs and circumstances.
• Paid-up additions option: This option allows you to use your dividends or additional payments to buy more coverage that increases your cash value and death benefit. This can help you grow your policy faster and more efficiently.
• Reduced paid-up option: This option allows you to reduce your coverage amount and stop paying premiums after a certain period of time. Your policy will remain in force until you die, but with a lower death benefit. This can help you save money on premiums or free up cash for other purposes.

Conclusion

Whole life insurance is a type of permanent life insurance that provides lifetime coverage and cash value accumulation. Whole life insurance has several pros and cons that make it appealing or unappealing to different people. Before buying whole life insurance online, you need to consider several factors, such as:

• How much coverage you need
• What type of policy you want
• Which provider you trust
• How much you can afford
• What riders and options you need

By following this checklist, you can compare different policies and providers online and find the best one for your needs and budget. You can also get a free quote or contact an agent today to get started.