The Process of Purchasing Life Insurance

Updated: Feb 3

Ever since I started in the life insurance industry I have noticed that generally, people don't understand the process of starting their financial plan or how to go about purchasing life insurance.

This explains why many wait until their mid 30's to purchase insurance. The easiest way to tackle this problem is to explain it step by step.

1. Do your research and find an advisor

This first step is crucial. Trusting your advisor is huge and will ultimately determine how comfortable and secure you are with your policy. Finding an advisor can be as simple as asking your friends who they've used, or googling about licensed advisors in your area.

2. Discovery Session (Consultation)

Yay! You've found a great advisor that you trust and are comfortable with. Now it's time to meet with them to discuss your needs.

In this first meeting you, and your advisor will walk through a few scenarios, you will be asked a few questions, and you will have the chance to go through your agenda as well. Remember, you're interviewing this advisor as well.

The purpose of this meeting is to get to know each other, and to pinpoint the areas that need to be protected.

As much as this is a qualitative meeting, money will come into play here.

You will most likely fill out a 'Needs Analysis' together. This is meant to establish the amount of capital you would require a policy to have for you to feel comfortable today, and tomorrow.

2. Market Research

Once your advisor has gathered enough information from you, they will take it to the market to find you the best product.

3. Recommendation

The purpose of your second meeting is to go over the recommendations from your advisor. Often, she/he will present 2 different products that fit your needs.

You will have the opportunity to learn about what these options have to offer you.

If neither of these options seem like the right choice, you and your advisor will continue with the initial discovery discussion to ensure your needs are fully understood.

4. Application Process

Once you have chosen a solution, your advisor will walk you through the application process. This step takes anywhere from 30 minutes to 90 minutes. Make sure you come prepared to spend that amount of time on the application.

This process requires you to dive into your financials, medical history, activities, hobbies, etc.

No need to worry though, everything is 100% confidential.

5. Underwriting

Once your application has been submitted, it will be sent to the insurance company (underwriting team). This is where they begin the process of assessing your risk.

In order for the company to come to a decision, they may need additional information from you. This could include:

  • Blood Tests

  • Vitals

  • Physician Statement

  • Bank Statements

  • Phone Interview