When it comes to life insurance, there are two things that you can be sure of: you need it in order to ensure your family’s financial stability in the future, and you have a lot of decisions to make when choosing a policy. It takes a lot of thought – and it should: it’s a big, important commitment. So if you’re unsure how to narrow down your choices, and how to decide which policy is right for you, you should first ask yourself the following questions; having the answers in your mind can make the process of comparing life insurance policies and buying the right plan much easier.
How Much Coverage Do I Want?
When determining how much coverage you will need, you have to ask yourself who depends on you and what kinds of debts you have. Typically, the death benefit on your policy should equal up to 10 times your current annual income, but it is important that you take the time to write down all of your current financial obligations, such as your mortgage, childcare expenses, car payments, and any other future obligations. Will you want to leave an inheritance when you pass away? Help your children pay for college? Buy a house? All of these things will need to be taken into account when choosing your benefit amount, and the best way to calculate your life insurance needs is to get help from a trained agent who can help you determine how much coverage you will need.
How Long Should I Have Coverage For?
Once you choose the amount of coverage you need, you will have two basic types of life insurance coverage options to choose from: term and permanent.
The difference between the two is that a term life insurance policy will cover you for a specific amount of time (typically 10, 20, or 30 years), while a permanent life insurance policy will cover you for your whole life. The advantage to term life insurance? It’s cheaper, and can be a great, affordable option if you want to provide income for your family to cover short-term debts and needs. For example, do you have a 30-year mortgage that your spouse would have difficulty paying off if you die? Then a 30-year term life insurance policy is perfect to cover those 30 years until the mortgage is paid off.
If you are unsure if a term life insurance plan will provide enough coverage, look into a permanent life insurance policy, which would allow your family to live comfortably, even after your debts are paid. These policies have a cash value growth potential and can replace income, assist with your retirement planning, and more. Comparing all of your different options will give you a better understanding of which policy is better for you and your family, and how much you can afford.
How Healthy Am I?
This question is important in determining which type of policy is better for you. Life insurance rates are based on multiple factors, and your health history is one of them: the healthier you are, the cheaper your premiums will be, and vice versa. But even if you do have health conditions, there is no need to worry! With a guaranteed issue life insurance policy, such as simplified issue life insurance, you will not be turned down because of your health; you will not have to answer medical questions, or undergo a medical exam.
Will Premiums Change Over Time?
This depends on which kind of coverage you go with. With term life insurance, your premiums start out lower than with permanent coverage and stay at a fixed rate for the term, but if you choose to extend your policy, your rates will go up. With whole life insurance, as long as you don’t let your policy lapse, your premiums are guaranteed not to increase for the rest of your life. If you choose to go with a universal life insurance policy, your premiums will increase with age, but if you have accumulated cash value, this can cover the increases. These are all things you will have to consider and compare when researching life insurance policies.
What Happens If I Don’t Die During A Policy’s Term?
If you opt to get a term life insurance policy, there is a good chance that you will survive the specific term, and if you do not pass away during the term, no one receives the death benefit. You do have the option to keep your policy and convert it into a whole life insurance policy, but you need to be aware that your rates could go up, especially if you develop health conditions. This is why it is important to consider from the start if a term life insurance policy is your best option, or if a permanent life insurance policy is better for your circumstances.
Choosing the right life insurance policy is necessary in order to ensure that your family gets the benefits they need. It might seem complicated and frustrating to find the right one, but it can be done, with some help. The best way to find the right life insurance policy for you and your specific needs is by working with an agent who specializes in life insurance. We have provided the top life insurance companies in the nation below; each offers hassle-free assistance and the most competitive rates. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.