Choosing a life insurance plan is something most of us will face at some point, but something that comes with plenty of questions and concerns. It’s a major decision, and one that can have a major impact on your family and loved ones. Fortunately, there are some solid guidelines that you can follow to make the process easier. You can find a life insurance plan that will give you and your family the peace of mind you deserve.
Understanding The Big Terms
In life insurance, there are two major types you need to understand and consider: term insurance, and whole life. Term insurance is life insurance that you have for a set period of time, while whole life insurance is insurance you have for the remainder of your life. Term life insurance is typically cheaper, and can be good for people who want to invest less in the short term. However, when the plan eventually expires, you will be looking to purchase a new plan and may pay more now that you are at an advanced age. Whole term insurance is good for those who are able to invest a little bit more in the near term, but hope to pay less overall [1].
Know How Much Coverage You Need
Knowing how much life insurance you need to purchase can be a tricky number to come to, but fortunately there’s plenty of help online to figure this sum out. The amount you need is typically determined based on how much you earn and how much you spend. A simple formula can then determine how much your family or beneficiaries would need in the event of your end of life. Look for a free calculator online that allows you to punch in your numbers and get a real example of how much life insurance you should be aiming for.
Ask Yourself The Tough Questions
One of the biggest factors that will help you determine how much life insurance you need will be seriously considering how long you are likely to live. It’s a subject that some people like to avoid, but something that will factor heavily in the final decision. Take into consideration the life span of your relatives, as well as your current lifestyle and any health factors you have. If you are working with a life insurance provider, he or she can likely help walk you through this process and look seriously at how much insurance you need based on your life expectancy.
Do A Cost Comparison
While signing up for life insurance is a responsible move, there’s no need to pay more than is necessary. After all, this is something you are likely going to be paying for month after month, year after year, for the rest of your life—you’ll want to make sure you get a great rate. One of the best ways to do this is to cost compare [2]. Speak to several providers to get quotes, and don’t be afraid to negotiate. In fact, you can use the fact that you are shopping around as leverage to talk the policy cost down. Don’t be quiet about the fact that you are talking to different providers, as these individuals are likely to fight for your business. And use personal factors like a healthy diet and lifestyle as a way to further get the cost down.
Make Sure You Know Your Stuff
Signing up for life insurance is going to entail answering a ton of questions, whether it’s your first time or you’ve been around the block before. Have things like medical records, family history, tax forms and pay information at the ready. You’ll also likely need to be checked out by a health professional, something the life insurance company will sometimes set up themselves. Be prepared to answer plenty of queries, and make sure to answer honestly. You don’t want to be penalized or rejected for dishonest information. Be straightforward but don’t sweat it—this is a process the life insurance providers have down to a routine, and they can help you along the way.
Be Sure To Ask Your Own Questions
While you will indeed need to answer a number of questions when signing a new life insurance policy, you should also make sure to ask some questions of your own. After all, the ultimate decision falls on your own shoulders. When considering a potential provider, ensure that the person you are working with understands your financial situation, and isn’t pressuring you to take on more than you can handle. Also make sure they provide you documentation of any pertinent information, and make sure they are officially licensed with your state. Finally, ask if they are prepared to review your policy with you from time to time, so that you can make any necessary updates. It is completely reasonable to expect that your needs are going to evolve and change over time [3].
Move Forward In Confidence
Choosing the right life insurance policy isn’t something you should rush, as it will have major implications for your loved ones once you are gone. And though it can sometimes feel intimidating, there are ways to simplify the process so that it doesn’t feel quite so daunting. By taking the time now to consider the best plan for you, asking the right questions, and doing some price comparisons, you should feel confident that you can land on the right plan for you. And once you have, you will find the peace of mind that your loved ones will be well cared for after you’re gone. It’s the kind of responsible step that both yourself and your family can be grateful for.
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