Life Insurance: 4 Ways to Pick a Policy That Works for You

Buying a life insurance policy is one of the most difficult decisions many individuals make. Some invest in life insurance for security reasons, feeling safer and more emotionally sound knowing that their loved ones will be all right in the event of an accident or medical emergency. Others purchase a life insurance policy for themselves, understanding that it could help in a bad medical situation.

There are hundreds of reasons to invest in life insurance, many of which are deeply personal and difficult for other people to grasp. What there isn't enough of is information on the importance of life insurance. There's no definitive guide to purchasing life insurance, no do-it-yourself template for finding a good policy, and a lack of unbiased information on getting a competitive deal.

1. Remember that insurance reps are there to sell to you.

Insurance representatives have a simple job to do: convince you that you need their product. In the case of life insurance, most people do need what they're selling, although the value in purchasing it directly from them is debatable. Understand that there are clear conflicts of interest in the insurance sales process and you'll walk out with a significantly better deal than if you took their word literally.

Arm yourself with the essential knowledge of a policy – the premiums, the monthly payments, and the potential payouts should anything go wrong – and you'll end up in a significantly better learning position. Being sold to doesn't mean that all insurance rep information is useless – take the chance to ask tough questions, gain valuable information, and confirm previously studied policy details.

2. Make use of grace periods and 'free trial' insurance offers.

Most life insurance policies will offer a thirty-day grace period, in which you're free to cancel your coverage and have your premium returned. This is a blessing for those unsure of what they need in a life insurance policy, as it allows them to effectively compare and 'test' a policy before buying it.

If your preferred insurance provider allows this 'free trial'-style test, use it to understand your policy before committing to a purchase. It's one thing to study a policy independently, often behind a desk and with other things on your mind, and another entirely different experience to test it first-hand.

3. Read your policy before you invest with your first premium.

Life insurance is a long-term commitment, one that should be studied in immense detail before it's purchased. Unfortunately, all too many insurance customers end up scanning over their contract in hurry and desperation before signing, effectively locking themselves into a poor deal for life.

Don't let that be you. Read your policy, learn its intricacies, and understand how it can change your life before you even consider signing it. There's a lot to be gained from effectively reading your life insurance contract, and an even greater amount to be lost by failing to read it. Be an informed buyer and know exactly how much you'll be paying, how it can help you, and why it's a worth purchasing.

4. Speak to several brokers and agencies before deciding.

The insurance industry is incredibly competitive, with agencies and major providers fighting over even the smallest commissions and customers. Use this competition to your advantage by speaking with as many brokers, sales agents, and life insurance providers as possible before making a decision.

Doing so allows you to get a feel for the industry – something that's vastly undervalued in a field where many sales pitches (and entire policies) are designed to deceive. Remember that there's no shortage of choice out there. If a deal sounds poor, manipulative, or just plain pushy, walk away from it and speak with another broker.