- A general guideline for coverage amount is 7 to 10 times your annual income, or use online calculators to estimate based on income, debt, final expenses and dependent needs.
- Term life provides level premiums (e.g., 10-30 years) at lower cost; whole life offers lifelong coverage and cash value at higher premiums.
- Most policies include a contestability period (typically two years) where claims may be denied for misrepresentation or suicide; some policies exclude high-risk activities.
- Premiums, policy type, exclusions, payout options, riders (e.g., terminal illness) and insurer financial strength (AM Best ratings) are key factors to compare.
Questions to Ask When Buying Life Insurance
If you're buying life insurance for the first time, starting with the right questions can help you find a policy that fits your budget and family's needs. To find a policy that fits your needs — whether you're figuring out how to buy life insurance or how to get life insurance — start with the right questions. The answers can guide you toward a policy that matches your budget, your family’s needs and the kind of protection you want to put in place.
Key Takeaways
This life insurance buying guide walks through what to look for in life insurance before you apply, including coverage amount, policy type, exclusions, premiums and company strength.
Quick takeaway: One of the best ways to buy life insurance with confidence is to compare more than price alone. Policy type, coverage length, exclusions, flexibility and insurer strength all matter.
Questions about coverage and policy type
There’s no such thing as a one-size-fits-all life insurance policy. A good first step in any life insurance buying guide is deciding what kind of protection you actually need and how long you may need it.
How much coverage do I need?
First, consider how much financial support your family would need if you passed away. Think about your income, outstanding debt, final expenses, and the age and needs of your dependents. If you have young children, for example, you may need a larger death benefit than you would if your children are already financially independent.
Online calculators can help you estimate how much coverage you may want. Absent a more detailed calculation, one general guideline is to purchase a policy with a death benefit that is 7 to 10 times your income.
If you want more help with this step, learn how much life insurance you need.
What’s the difference between term and whole policies?
There are two main types of life insurance many buyers compare first: term and whole life.
- Term: Term life insurance provides level premiums, such as 10, 20 or 30 years. It’s often a practical fit for temporary needs, such as income replacement while children are still at home or mortgage protection while a loan is being paid down.
- Whole: Whole life policies are a type of permanent life insurance. They can stay in force during the premium payment period, which may not be for the duration of coverage. Whole life policies are typically more expensive than term coverage.
Ask yourself these questions to help narrow down your policy type:
| Question to ask | Why it matters |
|---|---|
| Do I need coverage for a set period or for life? | This can help you decide whether term or whole life may be a better fit. |
| Am I looking for temporary protection or lifelong coverage? | Term life is usually more affordable, while whole life offers lifelong protection and cash value. |
| Will my needs change over time? | This may affect whether policy flexibility or conversion options matter to you. |
For a deeper side-by-side comparison, visit term vs. whole life insurance.
Questions about policy features
Whatever type of policy you’re considering, one of the most important parts of how to buy life insurance is understanding the details that can vary from one policy to another.
How will the death benefit be received?
You can choose among a range of amounts for the sum your beneficiaries may receive upon your death. With most life insurance policies, that death benefit is paid as a lump sum. Some policies, however, may offer installment-based payout options. Which approach is better depends on your family’s needs and financial preferences.
Is there a cash value?
Term life policies generally provide only a death benefit and do not build cash value. Whole life policies, by contrast, can build cash value over time. Depending on the policy, that value may be used to help pay premiums, support policy loans or provide other flexibility.
It’s possible to estimate what a policy’s cash value might be. Insurance companies may provide illustrations showing potential cash value growth over time based on assumptions about interest rates and other factors. These are projections, not guarantees.
What exclusions or limitations are there?
Most policies include exclusions or limitations that you’ll want to understand before you buy. For example, many policies include a contestability period. As a rule, insurers can deny a claim submitted within two years of a policy’s effective date if the policyholder misrepresented information on the application. Often, claims resulting from death by suicide are also denied during this period. Some policies may also exclude payouts related to certain high-risk activities.
Understanding these details up front may help avoid confusion later and is a key part of what to look for in life insurance.
Key policy features to compare:
Death benefit amount and payout options (lump sum vs. installments)
Cash value growth (whole life only; term life has no cash value)
Exclusions and limitations (contestability period, suicide clause, high-risk activities)
Riders or endorsements (e.g., terminal illness accelerated death benefit)
Questions about cost and insurer strength
Your policy type and death benefit amount are only part of the decision. You also need to consider affordability and the strength of the insurer behind the policy.
What are the life insurance premiums?
Choose a policy and death benefit amount that gives you premium payments you can comfortably fit into your budget. It’s worth shopping around, because premiums for comparable policies can vary by insurer due to differences in underwriting and risk assessment.
If you’re comparing options, How to Compare Life Insurance Companies can help you look beyond price alone.
How stable is the insurance company?
You want confidence that the life insurance company you select will be around for years to come. One way to evaluate an insurer’s financial stability is to look at ratings from AM Best, a credit rating agency focused on insurance companies. Most major companies have strong ratings. If an insurer were to fail, state regulators work in various ways to help protect policyholders.
| What to look for in life insurance | Why it matters |
|---|---|
| Premium you can maintain | Life insurance works best when you can keep the policy in force over time. |
| Policy type that fits your goal | The right structure matters as much as the price. |
| Financial strength of the insurer | A strong company may offer more confidence for long-term coverage. |
| Clear explanation of exclusions and features | This can help you avoid surprises later. |
Questions about applying and managing your policy
Before submitting your application, it also helps to understand the underwriting process, which is how your qualifications for the policy are evaluated.
How can you apply?
Some life insurance companies use dedicated agents. Others let you apply through independent agents or brokers, either online or in person, that offer products from multiple insurers. With companies like Amica, you can often apply directly through online applications or by speaking with a representative
The agent and the insurance company may review your health care records and ask you to complete a questionnaire about your health before moving to the next step.
Is a medical exam required?
Many life insurance companies require you to undergo a medical exam. After the exam, the insurer uses the results to make underwriting decisions. The full process can take days to weeks to complete.
Some insurance companies offer a simplified or accelerated process that allows you to qualify for coverage more quickly and without a medical exam. Keep in mind that no-exam coverage may be more expensive in some cases due to greater uncertainty about your health.
How to buy life insurance with more confidence
If you’re still figuring out how to get life insurance, start by focusing on a few practical questions such as what kind of protection do you want, how much support would your loved ones need and what premium can you realistically maintain over time? Those answers can help narrow your options quickly.
And if you want a broader view of the process, How to Get Life Insurance can help you understand the main ways to apply and compare coverage.
Get help as needed
Many people can buy life insurance without expert assistance, especially if they understand the process and know what questions to ask. That said, don’t hesitate to contact a trusted financial professional, including a financial planner or advisor, to discuss your options, compare policies and help ensure the coverage fits your family’s needs.
Get a life insurance quote today
FAQs about buying life insurance
You can often apply for life insurance online or over the phone with a licensed representative. The right option depends on how much guidance you want and whether you already know what type of policy you need.
If you’re just starting, it helps to use a life insurance buying guide that covers policy types, coverage amount, premiums, exclusions and application requirements before you compare quotes.
Ask how much coverage you need, whether term or whole life fits better, what exclusions apply, whether a medical exam is required, what the premiums are and how financially strong the insurer appears to be.
Look at policy type, coverage length, riders, exclusions, payout options and the insurer’s financial strength. Price matters, but it’s only one part of the decision.
It works as both. It’s a practical life insurance buying guide built around the key questions that can help you compare policies and buy with more confidence.
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ALIC11825, exp. 7/27