Take these notes into consideration when buying a life insurance policy.
A life insurance policy is designed to maintain your family’s finances when you are no longer there to do so. From paying funeral expenses, remaining debt, and your child’s college fund, life insurance is a policy that supports your family. There is a lot of information out there about life insurance, and so much misinformation. When deciding what kind of policy to purchase, be sure to note these considerations.
Understand your assets and liabilities. The amount of life insurance that you need will generally depend on your current assets and liabilities to your name. Ask yourself how your family could afford to go on as usual after your death, if your family will inherit anything, and consider future family expenses, such as marriage or education of children.
Know your risk factors.
Put simply, as long as you pay regular premiums to a life insurance company, then the policy should guarantee to pay out a sum of money if you die within the term of the policy. In essence, the greater your ‘risk’, the higher your premium is likely to be. Those risk factors are based on:
- Age
- Current health and weight
- Medical history
- Smoker status
- Family’s health
- Occupation
- Lifestyle
- Recreational activities
Those who have diabetes, high blood pressure, hereditary heart disease, or works at a dangerous job, such as a fire-fighter, stuntman, or pilot, you’ll pay more than someone in good health who works in an office.
Determine the immediate need. Individual insurance needs change with every stage in life. However, it’s known that the earlier one buys a life policy, the cheaper it works out. Locking in a low rate now will help you later on down the road. Even buying a policy in your youth will help your dependents in the future.
Assess the plans. Generally, you’ll be faced with making the choice of if you want life insurance for life or coverage for a set period. Term insurance provides coverage for a certain amount of time, such as 10, 20, 30 years, and the claim is paid to the family only if the policyholder died within the insurance term. Whole life (or permanent) insurance provides coverage for the whole life of the policyholder. The claim is paid to the family upon the death of the insured, irrespective of when it occurs.
Review as necessary. Once you have a policy in place, it’s essential that you review it when your income, lifestyle, and dependents change. This helps your loved ones get the most out of your life insurance.
Do you know what to look for in a life insurance policy and what it can do for your loved ones? Contact Donald Weiss Insurance Services. Our dedicated team will help determine your coverage needs, helping you pick the right policy and give you the peace of mind you and your family deserve.
