iven are key tips for first-time life insurance buyers.
Understand why you Need it
While most people need life insurance at some point in their lives, don’t buy a policy just because you heard it was a good idea. Life insurance is designed to provide families with financial security in the event of the death of a spouse or parent. Life Insurance protection can help pay off mortgages, help provide a college education, help to fund retirement, help provide charitable bequests, and, of course, help in estate planning. In short, if others depend on your income for support, you should strongly consider life insurance. Even if you don’t have any of these needs immediately, you still may want to consider purchasing a small “starter” policy, if you anticipate you will have them in the future. The reason: The younger you are, the less expensive life insurance will be.
Determine the Amount of Coverage you Need
The amount of money your family or heirs will receive after your death is called a death benefit. To determine the proper amount of life insurance, online calculators can be helpful. You can also get a ballpark figure using any number of formulas. The easiest way is to simply take your annual salary and multiply by 8.
Find the Right Type of Policy
Once you figure out how much coverage you’ll need, you can think about the best kind of policy to meet your needs. You have two main options: term life, for a more affordable premium, or permanent life, for more comprehensive coverage that can add cash value. But you have a lot of options to explore.
Look at the Quality of the Provider
An insurance policy is only as good as the company that backs it. You want to make sure you choose a company you can rely on to be around for as long as you’ll need your coverage, and one that invests premiums in a highly prudent manner in order to pay the claims of its policyholders.