Some people may think life insurance is simply a bet. Unfortunately, this mindset is increasingly common. The fact is, it is not a risk that you want to take because when you lose that bet, your family is the one who pays the price. Read on to find tips to help you make sound decisions in choosing a policy.
If you are not sure how much coverage is needed, you should take into consideration factors like the needs and quality of life of your family. Every family is unique and is going to have different needs, so make sure you’re the one determining what your family needs. Take into consideration fixed costs as well as one-time expenses, like funeral costs and estate taxes, when calculating the amount of insurance coverage necessary.
Whereas term life insurance is less expensive, it also is short term. The primary selling point of term insurance is that it costs much less than a traditional policy. Whole life policies are permanent assets, though, and you can even borrow against them. On the other hand, term life insurance only lasts as long as the payments are being met.
Calculate your actual life insurance needs, and let the result guide how much you purchase. Over-buying can needlessly cost you too much money, as under-buying can stress your family out financially if a tragedy happens. If you make correct decisions, you’ll feel more secure.
When making the decision to purchase life insurance, be sure that you allow yourself enough coverage. Your beneficiary can pay the mortgage, loans, or college tuition with the money.
Prior to buying a life insurance policy, make certain to do some comparison shopping. Life insurance premiums can vary by up to 50% between different insurance providers, so use online insurance comparison websites to quickly find the cheapest quotes. You should only compare quotes that take in consideration your previous medical history.
You should not feel pressured to invest in a policy that pays a significantly large sum of money. These policies can cause you to devote a significant portion of your income to premiums while you are still living. Just get an insurance policy that gives your family enough money to get by in the event of your death.
If you have a hobby or occupation that may be thought of as high risk, you need to let the insurance company know about this. Although you’ll have to pay higher premiums if you engage in risky activities, it’s better to be honest with your insurance company. If the company finds out that you’re engaging in these activities from someone other than you, you may lose your eligibility for coverage. Intentionally hiding this information is a form of fraud, and it can carry big penalties.
Don’t think that the first company you see is the “standard”. There are often companies that have variations in prices starting at 40 – 50% a month! Plenty of online sites will let you view and compare several quotes at once. Just look for one that also allows you to adjust the quote based on your own specs.
As previously mentioned, too many people consider life insurance to be a gamble. You just turned the stakes in your favor by informing yourself about life insurance.