Since the September 11th terrorist attacks, many Americans have felt an increased sense of vulnerability.  That concern is being reflected in a rise in the number of people buying life insurance.

The MIB Group, which has a database containing information from hundreds of American and Canadian life and health insurance companies, reports the number of life insurance applications in North America rose by nearly 2 percent in 2002.

Richard Wecker, president and chief executive officer of LIMRA International, a financial services trade association, says life insurance agents continue to see an increase in business as terrorism concerns linger.

Curt Penrod, a spokesman for State Farm, agrees. "It seems as though a number of people have had an epiphany," says Penrod. "Perhaps the recent tragedies have awakened people to the need for life insurance."

Whether you are looking for your first life insurance policy, or wish to increase your coverage, doing your homework will help you get the best policy at the lowest possible price.

Shop online first

While not all online quoting services will give you the best price available for life insurance, they can still be a useful source of information. Just remember, the more personal information you give, the more accurate your online quote will be.

You should also contact several agents or insurance companies to find out about their terms and rates.  Life insurance is a major expense, and it pays to do some comparison-shopping.

Don't buy a guaranteed issue policy
if you are healthy

"Guaranteed issue" life insurance policies, or similar products called "simplified issue" or "quick issue" policies, require no medical exam and are sold to anyone who applies for them and pays the premium. For this reason, guaranteed issue policies are riskier for the insurer than policies requiring medical exams. That makes them more expensive for consumers than insurance policies subject to normal underwriting.

While guaranteed issue policies can help people who have medical problems obtain life insurance, if you're healthy, you'll get better rates by undergoing your insurer's underwriting process, which may include a medical exam.

On the other hand, low prices alone shouldn't motivate you to buy coverage you don't want or need.