3 Tips for Buying Life Insurance
You work hard to provide for your loved ones. But what would happen if you passed away unexpectedly? Would they be able to make ends meet or struggle to maintain their lifestyle with the savings you’ve built up?
Consider that the cost of a simple funeral has risen as much as 227% since 1986. Add that expense to daily necessities, medical costs, and other incidentals, and your family’s finances may be tight.
Buying life insurance is a simple way to make sure you provide for your loved ones when you pass away. Here are a few life insurance tips to keep in mind when you start shopping for coverage.
1. Consider How Much Coverage You Need
Take the time to assess your family’s needs before you buy a policy. Think about their current lifestyle, their long-term goals, and any ongoing expenses they may face. Consider how much money you bring in each month and how much would be needed for your family to maintain a sense of normalcy if you’re gone.
Use this number to give you a baseline for how much coverage you should buy. Remember, you can always buy supplemental policies down the road if you decide you need more coverage.
2. Choose the Right Type of Life Insurance
There are two main categories of life insurance: term life insurance and whole life insurance. Term life insurance allows you to buy coverage for a set number of years. Once those years are up, you’ll have to buy a new policy to maintain coverage.
Whole life insurance allows you to invest in a single policy for the rest of your life. These policies typically cost more than term life insurance, but you won’t have to worry about coverage expiring or ending up with a higher insurance premium should your health decline.
Further, these policies often give you returns on investments made with the money you pay the insurance provider. And if you decide the coverage isn’t necessary, it’s possible to sell life insurance for cash, helping you recoup your investment.
3. Compare Coverage Options Before You Buy
One of the most essential pieces of life insurance advice you’ll need to remember is that insurance providers will charge different rates for the same coverage. Shop around and get quotes from at least three insurance providers. Get the different types of life insurance explained to you and gauge how receptive and helpful the representatives are.
Compare the coverage limits, term lengths, policy details, and premium rates in detail before you make a decision. Take the time to research their reputation and make sure other families found filing a claim easy.
Once you have a few providers in mind, choose the policy that offers you the best coverage and customer service at the most affordable price.
Keep These Life Insurance Tips in Mind
Buying life insurance is a great way to protect your loved ones from unexpected expenses when you’re not there to help. As long as you keep these proven life insurance tips in mind, you’ll be able to find a policy that works for your needs and financial goals.
Investing in life insurance is just one way to plan for the future. Check out our latest posts for more tips to help you set your finances up for long-term success.