Whether you’ve already bought life insurance or are in the process of purchasing a plan, you know how important a decision it is. Your life insurance policy is what will help take care of any loved ones you may leave behind. Because of that, you want to spend time deciding which policy is best for you and your family.
When looking at a policy, there are many factors that come into play. In fact, there are so many things to remember and questions to ask that it can become overwhelming very quickly. To help you through your journey of buying life insurance, here are four essential things to remember before you decide on a policy.
Know Why You’re Getting Life Insurance
Chances are you’ve already asked yourself why you need to have life insurance. If not, it’s a question worth asking. When you have a reason for getting insurance, it will help you decide on the type of policy, who the beneficiary will be, and the amount of the death benefit.
Any Illnesses That Are a Factor
A significant factor when purchase life insurance is the condition of your health. Poor health is likely to have a negative impact on the type of insurance policy you can get, and how much your monthly premiums would cost you.
If you have a disease or illness though, that isn’t to say that you will be turned down for life insurance. In fact, many insurance companies will still approve you for a policy. It isn’t the illness that would prevent you from getting coverage; it is the risk factor on the insurance company. However, if the insurance company sees that even with an illness you are a lower risk for them to insurance, it will work better in your favor. For example, if you have diabetes, you can look at getting diabetes life insurance from American Term.
Type of Insurance Policy
Another important thing to remember when looking at insurance policies is what type of coverage you’re interested in. There are two main types: term life insurance and whole life insurance.
Term plans cover for a set amount of time before you must renew it or let the plan expire. The premiums tend to be less expensive than other policies, but term does not have any additional benefits besides the death benefit. Whole life insurance, on the other hand, is a policy that covers you for your entire life. The premiums will cost you more than term, but it has a cash value on top of the death benefit. The cash value accumulates each month and is money that you can borrow against.
Do You Actually Need It
Although life insurance is something to consider seriously, it also needs to be realistic with where you are at in life. If you are someone with no dependents or loans, you may not need life insurance at this time. If you have a family with young kids or have debt that would fall on family members if you passed away, life insurance may be worth considering.
The reason behind figuring out if you genuinely need life insurance or not is that the monthly premiums can become pricey. It will be an additional expense to factor into your monthly budget.
When talking life insurance, there are many factors to remember. We have listed only a few of them, but ones that are essential. Consider the above points when talking to an insurance broker before making your final decision.
Life insurance is a great way to provide a safety net for a family that would be financially devastated, if something happened to the breadwinner. Now there are even life insurance policies that include chronic illness riders and terminal illness riders, these enable early access to some of the death benefit.