When you’re shopping for life insurance coverage, it can be a confusing process because of all the different kinds of policies that you can choose from. It’s important that you make the best decision for your loved ones, but it can be overwhelming comparing all of the types of insurance coverage. Getting the right life insurance policy does not have to be difficult. We work with people all the time and we have put together the best questions to ask yourself when getting a life insurance policy.
- How Long Do You Need Coverage?
Life insurance is meant to do a handful of very basic things. A couple of those are, one, to provide financial protection for a family or loved one, and two, to create a lasting legacy for your family.The second mention is easy to determine how long coverage is needed for. In order to certainly leave your family a legacy through life insurance, it would require that you own some permanent life insurance coverage, which would come in the form of Whole or Universal life.Having permanent life insurance coverage would guarantee that someday when you pass away your family WILL receive a life insurance settlement from you. This not only could provide financial protection for your family and dependents but having life insurance coverage well into your senior years could allow you to create a lasting legacy for your grandchildren or you’re your great grandchildren.If having permanent coverage is too expensive or just not for you the most important reason to have life insurance is to provide financial protection for your family, especially your dependents. With that said, take into consideration how old your children are. Having enough coverage to take them through their 18th birthday or college graduation is perfect. It limits the cost of life insurance for you as well as provides them financial protection through their dependency years. By the age of 18 or once they have graduated college your children should be on the way to self-sufficiency.
Due to permanent life insurance being more expensive than term life insurance, we are finding many policy owners are enjoying the idea of purchasing a blend of life insurance policies. An example of this would be to buy, say, $500,000 of term life insurance as well as a universal life insurance policy for $250,000 of coverage. This provides your family the best of both worlds; enough coverage for the present while you still have dependents at home, as well as a permanent policy you keep for your whole life so that someday you can leave your family the gift of life insurance to help create a lasting legacy.
- How Much Coverage Do You Need?
A basic rule of thumb to determine how much coverage one should purchase for family income protection would be to multiply the applicant’s income by 10. This in theory would allow you to leave your family with what amounts to ten years of your income to make ends meet should you pass away. To add to that you may want to consider adding enough coverage to create an education fund for the kids as well as maybe enough coverage to allow your family to pay off the home mortgage.If you want a detailed analysis of your family’s financial situation to determine an exact figure as to how much life insurance coverage you may want to consider, a life insurance calculator can be used to provide that in-depth analysis. Just give us a call or complete the quote form to speak with an agent who can help you with that life insurance needs analysis. To learn more about ways to know how much life insurance you need click HERE.
- What’s Your Budget?
This might be one of the most important factors to consider when deciding what kind, how much or how long your life insurance policy coverage should be. You certainly don’t want to break the bank when it comes to purchasing life insurance coverage.A general rule of thumb for how much life insurance one should consider purchasing on themselves is to multiply their income by 10. If you make $60,000 per year, you should consider looking into the cost for $600,000 of coverage and go from there, either increasing or decreasing the coverage amount.If you can’t afford the monthly premium on $600,000 of coverage then drop the coverage amount and try to fit the premium cost into your family budget. One thing is for certain, some coverage for your family is better than no coverage for your family. That’s for certain.If you don’t purchase enough life insurance right now, you can always go back and buy additional coverage or purchase another plan to supplement the one that you currently have. A life insurance policy shouldn’t drain your bank account every month. At the end of this article, we are going to discuss some of the ways that you can save money on your life insurance plan and still get a quality plan that protects your family.
- Do I Have Any Existing Life Insurance Coverage?
Many people are shocked to hear that they can own more than one life insurance policy. Now, although you can own more than one policy, that doesn’t mean you need to, or that it’s the right choice for you.However, when determining if you need life insurance, or how much life insurance coverage you may need, you should always take into consideration how much existing life insurance you currently have. If you have an existing policy providing $200,000 of coverage, and have learned that you should probably have $500,000 to provide adequate protection for your family, then all you need is an additional $300,000 of coverage.One very important factor to consider when determining if you have existing life insurance coverage is to not include group life insurance provided by your employer into this equation. Why is that? Because group life insurance is not an individually owned policy. If you ever leave your employer you will then lose that coverage. Don’t ever depend on it as life insurance coverage.While you shouldn’t rely on your employer’s insurance coverage, those plans can make an excellent supplement to the private plan that you’re going to purchase.Shopping Hack: Compare Life Insurance Policies From 12+ Companies
Getting Lower Insurance Premiums
One of the most common reasons that people don’t buy life insurance is because they assume that it’s too expensive to fit in their budget, but most applicants are surprised to see how affordable a plan can be. There are several ways that you can get lower insurance premiums, which means more money in your pockets. A couple lifestyle changes could save you hundreds, or even thousands of dollars on your plan.
The first thing that you should do is cut out any cigarettes or chewing tobacco that you use. Anyone that uses tobacco is going to be at a higher risk for being diagnosed with severe health complications, which means that you’ll pose a greater risk to the insurance company. They are going to offset that risk by charging you higher monthly premiums. In fact, smokers are going to pay twice as much for life insurance versus a person that doesn’t use life insurance. Quitting your bad habit will save you thousands of dollars every year.
The next thing that you should do is lace up your running shoes and hit the gym. Before the insurance company approves your application, they will require that you take a medical exam (unless you buy a no exam plan), and the results will impact on how much you pay every month. If you want to save money, you’ll need to improve your overall health before you take the exam.
The best way to ensure that you’re getting the perfect plan for your family at the lowest premiums is to work with an independent insurance agent. Unlike a traditional insurance agent, independent insurance agents work with dozens of highly rated companies. That means that they can bring all of the lowest premiums directly to you, without the hassle of calling all of the companies yourself. Our independent insurance agents can help save you both time and money on your life insurance process.
If you have any additional questions regarding what you’ve read here or have any questions related to life insurance in general or would like a life insurance quote, please don’t hesitate to give us a call or fill out our contact request form. We are always happy to assist you and answer any questions you may have.
You never know what’s going to happen tomorrow, which means that you shouldn’t wait any longer to get the insurance protection that your family deserves. If something tragic were to happen to you, and you didn’t have life insurance coverage, your family would be left with a massive amount of debt and other expenses, which is going to make the situation a thousand times worse. A life insurance plan will ensure that your family has the funds that they need, regardless of what happens to you.