Who really wants to think about dying? Buying life insurance means we must face our own mortality and that can be scary.
Most of us push it out of our heads anytime the thought arises but ignoring it won’t make it go away. It is an emotional decision but one that we must make.
When you understand how to buy life insurance, it becomes easier to face your fears and just get on with it.
Read on because we are going to show you what to look for and how to get the best rates with the most coverage when purchasing life insurance.
If you are married, have children or have others who may depend on you financially, you want to get life insurance. Even if you don’t have anyone depending on you directly, a life insurance policy will cover the expenses of a memorial or funeral.
It’s even more important if you have a mortgage or other types of debt. You don’t want your loved ones to be liable for your outstanding debt.
This trips people up right away. It can be confusing at first, but it doesn't take long to learn the difference between the two main types of life insurance.
Much depends on your personal needs, what you can afford and where you are in life. Just keep in mind that the cost of life insurance depends on your age, your health, medical history, gender, and lifestyle.
Term life insurance is the cheapest for most people and is probably the easiest to understand. The coverage and the costs stay the same for a specified amount of time. In most cases, it doesn’t have a cash value and you don’t receive money if you cancel it.
When the insurance expires, you either need to renew it or buy a new policy. Renewing will cost more.
It’s important that your term life policy guarantees that your coverage won’t be canceled due to poor health and that you are able to renew it when the time comes, regardless of your health.
Permanent insurance is more expensive than term and more complex but has more benefits. Whole life, universal life, variable life, and variable universal all fall under this type of life insurance.
As the name implies, it provides lifelong coverage. It also has a cash value that grows over the life of the policy and you won’t have to pay taxes on it. You can even borrow money on the value or surrender the policy for the current cash value.
The premiums will stay the same, you’re guaranteed the death benefit and the cash value is guaranteed to grow.
This is the driving factor for most people when deciding what type of insurance they get.
Of course, you have to get a plan that you can afford but you need to get enough coverage to take care of your existing debt, to pay for your children’s education and have enough to take care of your funeral expenses.
Getting the cheapest may not be the best.
So that you never forget to pay your premiums, most insurance companies these days offer automatic payments. The money can be taken from your checking account automatically on a yearly or monthly basis.
Some insurance companies may offer you a discount for paying annually or charge you a fee for processing your monthly payments.
Paying monthly may fit into your budget better so that you can afford the amount of coverage you need by spreading the payment out.
Permanent life insurance policies allow you to draw on the cash value that you have built up on your policy.
You may experience a layoff or some other type of situation where you need fast cash. You could even use the money to help finance your children’s education.
Payment may also be issued to help if there is a terminal illness diagnosis. This type of illness can cause a financial burden on the family. Part of your life insurance policy can help with this.
An LTC (long-term care) rider can be added to some plans. This can help pay for care in case you can no longer care for yourself. If you don’t use the benefit, the amount will be paid to your designated beneficiary.
It can be difficult to know how much coverage you should have. To help you figure that amount out, here are a few things to consider:
It’s important to shop around. Understand that even if a policy is cheaper, it doesn’t mean that you are getting the best deal. When comparing rates, you must take the level of coverage into consideration.
Your age is a deciding factor when determining your rate and coverage. You want to get life insurance as soon as possible because the older you get, the more likelihood of developing an illness or medical condition.
You need to start looking while you are still young and healthy. Once diagnosed with a disease such as cancer or diabetes, you may not be able to find any type of insurance that will cover you.
Many insurance companies will require a medical examination or a medical questionnaire. If you are not honest on your application, the insurance company can cancel your policy, refuse to honor claims and could prevent you from getting insurance from any company at all.
If you have waited too long and are faced with a serious health condition, there are some insurance companies that will grant you a policy, but the payout is minimal.
Although the coverage from an employer life insurance policy will not provide enough, it’s better than nothing. There are some other pitfalls to relying only on this type of life insurance. If you would lose your job, you will also lose your insurance coverage.
Another problem is that if you develop a serious illness and you can no longer work, you will lose your coverage when you need it the most. If you did recover and got a new job, your new premiums would cost too much based on your medical history.
If you can afford it and if it’s justified, it’s legal to have more than one life insurance policy. It’s possible to get a combination of permanent and term insurance.
This can be especially beneficial if you live to the end of your term insurance because you will have your permanent insurance to fall back on. If you do this, it’s important to plan ahead to get the best possible rate.
Another scenario is when you are just starting out in life, your pay is usually the lowest of your career. You may only be able to afford the basics when it comes to coverage. As your pay rate increases, you can add another policy.
You must pay your premiums on time or your insurance company could cancel your policy. This could result in paying higher premiums and even difficulty finding another insurance company to cover you in the future.
It’s important to update your policy when a serious life change occurs, such as marriage, divorce or a new child. You want to make sure that you and your family have adequate coverage and protection.
When you are searching for the best provider, here are some tips to help you find the best company or agent for your needs:
As you can see, knowing how to buy life insurance in 2019 will prepare you and your loved ones for the future. You will have peace of mind knowing that your loved ones are taken care of if something should happen to you.
Although no one wants to think about dying, it's important to take care of this before something happens.
If you are ready to get more information on finding the best rates and coverage, contact us today so that we can help you find the best option for you and your family.