The Do’s and Don’ts of Buying Life Insurance
Do you have life insurance? If not, why not? The answer to this question may be more complicated than you think. Many people believe that they don’t need it because they are young, healthy, or their family doesn’t depend on them for income. However, there are many other reasons that someone may want or need life insurance. For instance, if you are the only breadwinner in your family, you may want to consider getting life insurance to ensure that your family will still be able to pay the bills and stay in the house even after you’re gone. Getting life insurance can be confusing, especially since there are so many different kinds of policies out there, and you need to know what you’re getting into when you buy life insurance. Luckily there are plenty of resources to help guide you through this complicated process including this article!
1) DO Understand how life insurance works
Life insurance essentially allows you to provide money to your family in the event of your death. It replaces the value of your income so that your family can maintain their standard of living. Typically, you will be required to pay for this policy each month until you pass away. There are different types of policies with varying levels of benefit payouts which you should understand before buying life insurance. If you need help finding the best life insurance provider or policy for you, research online or ask your local agent. Make sure you ask everything you’re curious about to your agent so that you know exactly what you’re getting into before buying life insurance.
2) DON’T Underestimate how much life insurance you need
You may think that buying $50,000 worth of coverage will be fine for you and your family. However, it’s important to remember that this is just a base-level policy – it isn’t meant to replace all of your income or be your family’s entire financial cushion. Think about the other things that you and your family need in order to maintain their standard of living after your death. If you have a mortgage, kids, or dependents who rely on you for income – it would be wise to get at least $100,000 worth of coverage so that they don’t suffer a major change in lifestyle.
3) DO Understand your health
When you apply for life insurance, the company will want to know about any medical conditions that you have been diagnosed with or have experienced within the last 5-10 years. If they find out that you haven’t been completely honest on your application, they may choose to not payout your claim. If you do have any medical conditions, make sure that you disclose them all before buying life insurance because otherwise, they could end up costing your family thousands of dollars if something happens to you.
4) DON’T Shop By Price But By Value
You may be tempted to just go with the cheapest life insurance policy that you find. While the price is important, you should also consider all the features of the product to determine its value. For example, some companies offer features like terminal illness, critical illness, or accidental death coverage. These features may come with a higher price tag, but they could be more value for you and your family instead of a cheaper policy that doesn’t provide these benefits. It would be worthwhile to spend a little bit extra now at the beginning because it will save you money in the long run if something happens to you.
5) DO Get Life Insurance For Your Partner Too!
Don’t just get life insurance for yourself – getting it for your spouse is just as important! Even if they have a good full-time job or earn their own income, it’s still important for couples to have life insurance policies in place. It’s important that both of you have an insurance policy because together you are a more valuable unit to insurance companies. Typically, both of your lives would be valued more if you were together rather than apart. Also, if you have any debts or loan balances that are in both your names, it might be worthwhile to get another life insurance policy just in case something happens to the other person.
6) DON’T Put It Off!
This is an important decision that should take your time with, but don’t procrastinate. You may not feel ready for this step and that is fine but you should do it as soon as possible. The reality is that life insurance shouldn’t take a backseat and the sooner you do it, the more time you have to adjust your coverage and pay less money. Life insurance provides your family with financial stability after your death. You shouldn’t put them in a situation where they start hunting for this money right away because it can be difficult and even impossible to find depending on the circumstances.
7) DO Find A Good Agent
When buying life insurance it is important that you have a good and reliable agent since this will be the person that you will be communicating with throughout your entire insurance journey. You want to make sure that they are experienced, reliable, and trustworthy as well because this is a major decision and process in your life. When you’re looking for an agent, make sure that they are licensed. If they are certified by organizations, that is a sign that they will provide you with great service. Also, look at what other customers think of them on popular review sites. Customer reviews will provide you with great insight into your potential agent’s character and services.
Buying life insurance is a complicated process, but with the right guidance and information, you can find the best plan for your needs. If you were thinking about whether or not to buy it, hopefully, this article has convinced you to buy it after all. When deciding on your life insurance plan, consider things like your health condition, family situation, and budget to choose the policy that suits you best. We hope that this article has helped guide you through some of these challenges in making an informed decision about what type of policy to purchase.