Purchasing Life Insurance
If you are on the hunt for purchasing life insurance, there are a few things you should know. We will go over some factors that you should keep in mind while you are shopping around for a policy.
1. Life Insurance is Not an Investment Product, it is a Risk Management Tool
The main purpose of life insurance is to help mitigate the financial burden that your death will cause your loved ones. Typically, you will not benefit from your life insurance policy, only your named beneficiaries will. Also, most life insurance policies do not increase in value over time. You will pay a set premium amount for a set amount of time, and in return, your beneficiaries will receive the death benefit amount that you purchased.
2. There are Two Main Categories of Life Insurance
The two main types of life insurance are term life and whole life. A term life policy will cover you for a specific term, or period of time. Typically, you will buy a policy to cover you for 10, 20, or 30 years. Once your term expires, you no longer have insurance coverage and will have to purchase a new policy or renew your old one to maintain coverage.
Whole life insurance will cover you for your entire life. As long as you pay the premiums, you will have coverage. However, because the insurance company knows they will have to pay out your death benefit, your premiums will be substantially higher than with a term policy.
3. What Do You Need Life Insurance For?
Whatever stage of life you are in, you need life insurance. It may be for a different amount or different reasons, but you still need coverage. If you are unsure of which coverage you actually need, it might be worth trying to find out more at Garrity Insurance.
If you have children, whether or not you are married, you need life insurance. Life insurance will help to cover the expenses of raising your children if you were to pass. This includes everything from daily living expenses to college education.
If you are married, with or without children, life insurance will help them to pay the bills and ease the blow of losing your salary.
Even if you do not work, you should still have a life insurance policy from a provider similar to discountlifecover.co.uk. This will help to cover the costs of finding someone to replace the services you took care of, like housekeeping and child care.
4. It is Not One and Done
After you purchase your first insurance policy, it does not mean that you never need to think about life insurance again. You should review your life insurance coverage every few years and evaluate your needs.
You may want to purchase more coverage if you have a salary increase, you have another child, purchase a new home, or get married.
5. Learn About Different Riders Available to You
If you want to add a little bit more coverage for minimal cost, a rider may be just what you need. There are many options for riders, each one providing additional coverage for different financial aspects. The most common riders available include:
- Long Term Care Rider: This allows you to use your death benefit to pay for long-term care expenses, if necessary.
- Spousal/Child Rider: Provides additional life insurance coverage for your spouse and/or children.
- Accidental Death Benefit Rider: Gives you an increased death benefit if your death is the result of an accident.
6. Life Insurance Agents are There to Help
Not all insurance agents fall under the stereotype of pushy and untrustworthy. Meeting with an insurance agent who also has other financial designations can be of a great benefit to you. They can help you to better understand the different types of policies available to you, calculate exactly how much insurance coverage you need, explain all of the provisions of your policy, suggest trustworthy insurance companies, and much more. If you are looking for help in your search for life insurance, take the time to meet with a qualified insurance agent.
This information just scratches the surface of what there is to know about life insurance. There are so many different types of policies offered by so many different companies, it can be overwhelming to find the right choice for you. But you do not have to take on this process alone. If you have questions or want to learn more about life insurance, you can contact us by clicking here.