Life Insurance Tips and Advice
Buying life insurance is an important purchase. The more you know about it, the better your chances of buying the right plan for your needs. Below is a list of tips and advice taken from life insurance professionals to help you navigate the decision-making process.
Choose the Type of Policy You Want
Two main categories of life insurance are permanent life and term life. The main difference between the two is that a permanent policy covers you for as long as you live. Meanwhile, a term life insurance policy provides coverage for a set period of time, typically 30 years or less. Permanent policies also accumulate cash value over time, while term policies do not.
Term life insurance policy is usually more affordable than a permanent life policy, but the right policy for you depends on numerous factors related to your age, coverage needs and finances.
Calculate Your Insurance Needs
Calculating the ideal amount of life insurance coverage is complex. If you purchase more coverage than you need, you can be burdened with years of policy payments that are unnecessarily high. If you purchase too low an amount of coverage, your beneficiaries may not be adequately compensated for your loss, which defeats the point of buying life insurance in the first place.
At the very least, consider using a basic life insurance calculator that can factor in the cost of your final expenses, outstanding debts, mortgage payments and your children's future college tuition. This will help you fully understand the amount of expenses your loved ones may face in the event of your death.
It also helps to seek life insurance advice to determine the appropriate amount of insurance coverage. You can call 1-855-303-4640 to connect with a licensed life insurance agent who can help you sort through all of your assets, debts and dependents to come up with a life insurance value that suits your needs.
Buy a Life Insurance Policy Early
TPolicy rates are dependent on age, health and medical history, among other factors. Many times, the younger and healthier you are, the less of a risk you pose to the insurance company. And the lower the risk, the better rate they may offer you.
If you choose to wait, you may end up paying dearly for it. As pointed out by Kevin Mercadante on MoneyUnder30, the difference between buying a life insurance policy at age 25 and age 35 can be more than $1,300 per year.
Consider Life Insurance Riders
One life insurance tip is to purchase riders, which are supplemental benefits that can be added to your life insurance policy to increase its value or offset some of the limitations of its coverage. Some of the things that can be accomplished with the help of a rider include withdrawing funds, adding coverage for a spouse or child or doubling the payout for an accidental death.
“Riders empower you with much-needed control over your ever-changing life situations,” writes Pooja Dave on Investopedia. “So sit down with your insurance advisor to evaluate the benefits of the rider and buy the one that is best-fitted for you and your family.”
Review and Renew
Your situation will likely change over time, and your life insurance policy should have some flexibility. Policies are not written in stone and may allow updates and modifications to be made should you get married, buy a home, have a child or experience other life events that may warrant a longer or higher life insurance policy.
Take the time to review your policy any time you experience a life-changing event. One life insurance industry tip is to review your policy every year, regardless of whether you experienced any life changes.
Select the Ideal Beneficiary
The best life insurance beneficiary for one person may be different from that of another. Know what your options are according to your family situation. Common life insurance industry advice is to familiarize yourself with laws and situations such as naming minors as beneficiaries, having multiple beneficiaries and leaving your life insurance benefits to your estate.
Get Life Insurance Tips and Advice From a Licensed Agent
Not all life insurance policies or companies are exactly the same. Take the time to shop around for the one that can offer you competitive rates and terms. Better yet, let a licensed agent help guide your search.
*Applications for insurance may be subject to acceptance by insurer. Rates and coverage amounts will depend upon the carrier selected.