7 Best Tips If You're Buying Life Insurance for the First Time
Are you opting to buy a Life Insurance but don't know where to start? Find 7 important Life Insurance Tips before you buy life insurance for yourself
It’s never fun to think about what would happen to your loved ones after you die, but it must be done to set up a way to protect them in that event.
If you are newly considering life insurance as a part of your plan to care for those you love, you may be wondering what to look for.
Life insurance is definitely a responsible move, but not all policies are created equal. So how can you be sure you purchase the best policy?
These seven tips can help you buy a policy that is worth the money:
1. Learn the Lingo
Before you contact a life insurance carrier, you need to educate yourself on the basics of life insurance.
This way, when the agent begins to discuss the policy with you, you, first of all, understand what they are saying, and second, will know which options are the best for you.
Investopedia has a great article that breaks down how life insurance works.
2. More Is Always Better (If You Can Afford It)
If you are buying life insurance for the first time, chances are you still have plenty of years left in your life.
Buying young is always a good idea for life insurance because you can get an outstanding rate for a high death benefit.
Many people make the mistake of buying just enough life insurance to cover their debt. The truth is that without life insurance, you will not only be leaving your family with your debt but also without your income.
Could your spouse be able to manage a household alone? What about college tuition for your kids? It’s important to consider all expenses that may come in the future.
Of course, you don’t want to put financial stress on your life now to protect your family in the future. Only buy the life insurance policy that you can afford.
3. Choose a Good Insurance Company
Although it may be tempting to buy a life insurance policy from a smaller company that offers you thousands of dollars in coverage for a small monthly payment, it’s better to buy from a reputable company.
You could end up paying on your life insurance policy for years only to have your insurance company go bankrupt.
More prominent companies are more financially stable and can guarantee that you are covered for decades to come.
Read a review on what sets one of these major life insurance companies apart.
4. Know the Difference Between Term vs. Permanent Life Insurance
There are two main types in the world of life insurance: term life insurance and permanent life insurance.
Term life insurance only covers you for a predetermined amount of time. This can buy you time until you pay off your mortgage or save up for retirement. This type of life insurance is much cheaper to purchase.
Permanent life insurance is more expensive because it covers you for your entire life. You won’t need to worry about it running out.
5. Consider Adding Riders
Every policy is different in what it includes, but it’s important to know that even if a policy doesn’t include certain terms you would benefit from, you can add them for additional costs.
These additional terms are called “riders,” and these can significantly improve the value of your life insurance policy.
Learn all about popular life insurance riders here.
6. Quotes Aren’t a Guarantee
When you are shopping around for an insurance policy, you would only answer a handful of questions, and they will give you a quote for the price of your policy.
This quote is just an estimate or ballpark number. In order to know the actual price of your policy, you will need to answer a lot more questions.
They will have you fill out a long form with many questions, of which some might seem like ridiculous questions and even require a medical exam before they will give you the accurate price of your policy.
7. Work With a Professional
Buying life insurance can be a complicated process. Even with due diligence, you can still feel uneasy with your choice of insurance policies.
You can have much more confidence in buying life insurance when you enlist the help of a professional insurance agent.
They can learn about your unique situation and ask you important questions.
They can then help you to sift through the plethora of information and steer you to the best policy for your needs.
Buying life insurance for the first time can be stressful, but it doesn’t have to be.
With a little bit of research and help from the right people, you can find the right policy and have peace of mind knowing that you took action to protect your family.