Buying life insurance can be a difficult decision. It’s an emotionally charged issue, and you’re putting your money down for a product that you hope you’ll never have to use. Then, there is the difficulty of determining how much coverage you need and what type of policy is best for you.
Here are 5 tips that will help you make an informed decision and purchase the right life insurance plan:
Get Life Insurance Quotes Online
The easiest way to shop for life insurance is to get quotes from several companies at once using an aggregation tool. These tools will give you quotes from multiple companies in minutes, so you can compare apples to apples before talking with an agent or salesman.
Shop Around for The Best Price
Just because one company provides a quote, it doesn’t mean that’s the best deal available. Because of the way life insurance works, almost any company can afford to provide a quote, but not all can actually afford to pay your dependents if something unfortunate happens. You should always shop around for the best price and coverage before buying.
Know What Kind of Policy Is Right for You Before Shopping Around
Do you want term insurance or permanent? Term life insurance is almost always much cheaper than whole or universal life because it doesn’t include an investment component. If you don’t have any dependents, or if you have a lot of dependents, but they don’t require much financial support after you die, term insurance might be all you need. If you need to ensure long-term financial protection for your dependents, a permanent policy may be the way to go.
Make Sure You Understand Your Policy and What It Covers
Don’t just blindly sign up for a policy because an agent tells you to do so. Review it carefully to make sure it provides enough coverage for your family and that it adequately protects your loved ones.
Know how Much Coverage You Need
Life insurance is designed to replace income and cover your family’s financial needs if you die. But it isn’t just about how much your dependents will need to pay off your home or other debts. You’ll also need to think about how much would be needed to pay for any long-term needs. A good rule of thumb is to get a sum that’s equal to 10 times your annual salary, but that isn’t necessarily the right amount for everyone.
