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Is Life Insurance Really Worth the Time and Cost?

Let’s face it: Life insurance can look pricey on paper. A lot of people shy away from procuring a life insurance policy for this very reason. Is life insurance really worth the time and cost?

For those skeptical or curious about investing in life insurance, we may need to do some myth-busting to get to the central question. We’ll break down what life insurance is and whether the cost and commitment make sense.

Types of Life Insurance Explained

To answer this question, it’s important to understand the two basic types of life insurance: term and permanent.

Term life insurance offers a predetermined “death benefit” (a payout to the beneficiary of the life insurance policy). It covers the policyholder for a certain number of years, usually somewhere between five and 30. The annual premiums of this plan are set on a fixed rate. Like health insurance premiums, they are based primarily on your health and life expectancy at the time you purchase the policy.

Permanent life insurance is similar in some ways, but different several others. They’re different in that they’re connected to a savings or investment account and will cover you for as long as you’re alive rather than for a set number of years. Like term life insurance, these premium costs are based on your health and life expectancy at the time of purchase. But unlike term life insurance, premiums are not always a fixed rate.

Most people don’t opt for permanent life insurance because it’s far more expensive for a similar amount of coverage. While the savings or investment account connected to a permanent policy can accumulate cash value over time, the steep price of premiums may cancel it out.

For most policyholders, term life insurance is the better and more manageable option.

Is Life Insurance Too Expensive?

While it may seem like you’re saving money in the moment, it can cost you much more in the long run to not have life insurance. Although the full price can look high, life insurance is actually pretty cheap when you break it down.

Especially right now, life insurance rates are incredibly affordable.

Even with the best deals in years, is life insurance worth the expense? Before you answer, consider not only the intangible costs of waiting to purchase and also significant long-term financial risks of not having life insurance.

Most significant among those is that if you were to die unexpectedly. If you have no life insurance policy at your time of death, your remaining family becomes solely responsible for making up any outstanding debts. Those can include student loans, emergency or medical costs, health care, mortgages, credit card debt or college tuition. All of those expenditures don’t even account for regular living expenses—or the loss of a secondary income.

All costs considered, it can actually be a smart bargain to invest in life insurance if you have next of kin to account for.

How Long Does It Take to Get Life Insurance?

Getting approved for a life insurance policy, like some of the most important things in life, can take a bit of time. Even if you’re a person busy with your work and home lives, don’t let this become a deterrent.

The length of time it takes to procure a policy depends on a few factors. Sometimes, you can get one in less than 24 hours. But typically, the process takes about four to eight weeks if you opt for a fully underwritten policy.

The process involves a few steps: First, you get a rate quote, which only takes a few minutes.

What’s even more valuable? Take 15 minutes to work with one of our licensed sales agents to review your full health history. We offer a more thorough, personalized service that pairs you with the best carrier for your specific needs and budget.

The next step is the actual application. For most insurance companies, you can do this online, but some require the forms by hand.

After you’re finished filling out the application, you’ll send it off to a medical company for review. After about 24 to 72 hours of receiving it, the insurance company will schedule a simple medical exam. The exam will usually take place within a week or two. The exam itself often takes no more than an hour.

So far, this is only a few hours of your time. And you’re a week into the overall process.

The lengthiest part of the process is the underwriting. The insurance company performs this portion. While out of the applicant’s control, it’s important to understand the entire timeline and how the sooner you start the process, the sooner your policy will take effect.

The timespan on underwriting can depend on the results of your medical exam as well as how long it takes results to process. Requesting your medical records is most often the determinant in how long it takes to get life insurance. This can take up to six weeks.

In the closing steps, the insurance company conducts a final review and writes up your policy, providing you with complete paperwork.

Overall, the approval process from start to finish can take up to two months. And remember, if you’re concerned about when coverage will take effect, it should be reiterated that most of the time required happens on the insurance company’s end — including those six weeks for underwriting. The only tasks requiring your direct involvement are the application and the medical exam.

What About the “No-Exam” Option?

If you need to get coverage fast, you also can opt for a no-exam life insurance policy. Here, you can apply online and skip the medical exam. This turnaround can take anywhere from 24 to 48 hours. And the policy can take effect right away.

Take note that these options are often more expensive and offer a much smaller benefit.

So … Is Life Insurance Worth the Time and Cost?

Ultimately, whether life insurance is worth your time and money is up to you to decide.

But with its low monthly costs, financial protection for surviving family members, and potential tax and borrowing benefits, a life insurance policy can make for a wise choice.

Life insurance can be a powerful tool to have in place should something unexpected happen. When you’re ready to take the reins, contact SelectQuote. We work for you, not insurers. We’ll impartially shop highly-rated insurance companies to find you the right term life policy to fit your budget, your schedule, and your needs.

When you’re ready to start or update your life insurance coverage, get your free quote or speak with one of our licensed agents.

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