When buying term life insurance, you want to find the right amount of insurance coverage at a reasonable price with a company you can trust. But for many people, getting started is the hardest part. That’s where the following life insurance checklist can help.

1. What would you like to achieve with your policy?

Ask yourself what you want your life insurance to do. For example, do you want insurance coverage that:

o Pay for funeral arrangements?

o Pay the outstanding balance of a mortgage and other debts?

o Does it compensate for the loss of your income? And if so, for how long?

o Contribute to the future education of your children?

o A combination of all or part of the above?

Knowing what you would like to achieve with your life insurance policy and approximately how much you need to achieve these goals will help you determine how much life insurance to consider purchasing. Online life insurance calculators are available to help you put a dollar value on the amount of coverage you need.

2. Who would you like to insure under the life insurance policy?

Most insurance companies offer a variety of life insurance products to suit your lifestyle and family needs. You can get an insurance policy for your own life, or you can get a policy for yourself and your spouse (called a joint life insurance policy). The most common joint life policy provides coverage when the first partner dies, leaving the life insurance benefit to the surviving spouse.

3. How long will you need life insurance?

It is not necessary to consult a psychic, although it does require you to calculate the timing of your life insurance needs. For instance:

o When will your mortgage be canceled? The repayment period for your mortgage will often determine the length of your term life insurance policy.

o When will your children finish school? One day they will finish their education and it will not be necessary to have enough life insurance coverage to pay for their educational expenses.

o When do you plan to retire? You will have less income to replace at that time.

Knowing how long you will need life insurance coverage before you start shopping will ensure that you are comfortable with the life insurance product you end up buying. Online tools are available to help you determine which term for your life insurance policy is most recommended for people with similar lifestyles.

So now that you have the questions of how much, who and how long have been answered, you are ready to buy.

1. Compare life insurance quotes from various companies:

It’s worth comparing prices because life insurance rates can vary considerably depending on the product you choose, your age, and the amount of coverage you request. This is the easy part, because with the Internet you can easily compare life insurance quotes, online, at any time.

2. What type of life insurance has been quoted: standard or preferred?

There are two groups of basic life insurance rates that you should be aware of when purchasing life insurance coverage: standard and preferential rates. Standard life insurance rates are the rates that most Canadians qualify for, while about a third of the population is eligible for preferential rates.

Preferred life insurance rates are generally offered to very healthy people, which means you can pay a lower premium than most. Typically, preferred rates are offered only after medical information and test results are known. It will depend on your blood pressure, cholesterol levels, height, weight, and family health history. But the preferential rates are worth it. They could save you up to 30-35% off your quoted premium.

When comparing prices, be sure to compare ‘standard to standard’ or ‘preferred to preferred’ life insurance rates. If you are not sure, ask the broker. It would be disappointing to learn that you were quoted preferential rates at first, only to find that you don’t qualify for them later.

3. Check the availability of the life insurance broker:

How easily can you communicate with the broker? What are your office hours? Whether through their website or over the phone, the life insurance broker should be easily accessible to you if you ever have questions or need to talk to him about a change in your life insurance needs. Look for toll-free numbers and extended hours of service as guides.

4. Review the medical information required to obtain the policy:

Typically, the more medical information you provide, the better the price. For a policy that asks few or no medical questions, you can bet that the premium is higher for the same coverage than it is for a plan that asks for more information. Depending on the company, your age, and the amount of coverage you want, you may be asked to provide blood and urine samples. To obtain the samples, a nurse will visit you at no cost to you.

5. Consider the financial strength and stability of a life insurer:

The financial stability of a business is something to consider if you plan to make a long-term purchase such as life insurance. There are organizations, such as AM Best, that evaluate insurers and give a rating on their stability and strength.

6. Ask about renewal options and requirements:

Once the initial premium is set, it is generally guaranteed for the life of the policy (often 10 or 20 years). But what happens when the policy expires? Most policies are renewable until age 70 or 75, so be sure to ask your broker if you will need a medical exam to renew your policy. While your premiums will be higher at renewal, find out if they will also be guaranteed to stay level during the second policy period.

7. Confirm that the policy can be canceled without penalty:

Most term life insurance policies can be canceled at any time without penalty. Be sure to check with your broker to see if the life insurance company has unusual cancellation policies.

8. Consider the conversion options and policy restrictions:

As your life changes, so do your life insurance needs, and you may want the option of converting your coverage one day.

Converting a term life insurance policy means transferring all or part of the policy’s death benefit to a permanent life policy without medical coverage. For example, let’s say you originally purchased a term policy to protect a mortgage and a child. Once the mortgage is paid off and the child grows up, you may want to convert the policy to one that gives you a new level premium for the rest of your life and a death benefit that is guaranteed not to expire with age.

When you buy your life insurance policy, find out if there are any limitations on your age at the time of conversion. In most cases, you have the option of converting until age 60 or 65. Also, make sure you are given several options of the type of policies you can move into, the more the merrier.

Final tip: choose a life insurance broker you trust:

While it doesn’t necessarily affect the type of policy you choose to buy, a relationship with your broker is critical to feeling comfortable with the life insurance policy you buy and the information you have received.