Whether buying life insurance for income protection or ensuring future education expenses are met, you've made a smart decision. Buying life insurance that aligns with your needs and goals can be tricky. To avoid making mistakes, you want to get it right from the get-go. To help you along, we explore 5 things to consider before buying life insurance.
Coverage amount
First, evaluate your financial situation, personal circumstances, and needs to determine the coverage amount you need. Do you have a mortgage to pay off? How many people are financially dependent on you?
Do your children intend to attend college? What are the long-term needs of your family? Assessing your needs will ensure the coverage you buy will be enough to secure your loved ones financially after you pass away.
The type of life insurance you need
There are various types of life insurance, the most common being term life and permanent life insurance. So you want to select one that best suits your situation and needs.
Term life insurance protects for a specified period, which could be 10, 20, or 30 years. For example, if you buy a policy valid for a 20-year term, your dependents will receive death benefits if you pass away at any time within the 20 years.
On the other hand, permanent life insurance remains for the entire duration of your life, as long as you pay your premiums. In addition, it accumulates a cash value you can withdraw or borrow against.
Your budget
How much can you afford to pay for insurance? If you're budget-conscious, term life insurance may be your best option as it's generally cheaper. However, you'll miss out on permanent life insurance's benefits and flexibility.
Several factors determine insurance costs, including age, gender, coverage, industry you work in, health state, marital status, and so on. An independent agent will be able to assess your needs and financial situation, and help compare policies to find you the most suitable coverage.
The best time for life insurance
The younger you are, the wider the life insurance options available to you. Also, premiums are lower when you buy life insurance at a younger age. In addition, health plays a factor in insurance costs - it is less expensive for healthy individuals.
In the light of these, the best time to purchase life insurance is now. You'll be able to choose from a broader range of options and pay a lower rate.
Strength and reputation of the insurance company
An insurance company's financial reputation and strength are other factors to consider. That's because some insurers may be unable to fulfill their obligations to beneficiaries or delay payment. Check their customer service, claims process, claims payment ratio, and overall reputation.
Life insurance can provide peace of mind. But it has to be the right policy
Life insurance can provide peace of mind and financial protection for your loved ones when you can no longer care for them. But you have to choose the right policy.
Our agents can assess your situation and help you find the policy that provides the necessary coverage and aligns with your financial goals. Contact us today.