Life insurance is one of the most important purchases you will ever make and there are so many options. Choosing the life insurance plan that is right for you can be an overwhelming process.
The pandemic has a lot of people wondering if they should have life insurance and if so, where do they even begin. Here are 5 tips that will help you navigate the process of purchasing life insurance.
- Know your options:
According to Coventry Direct, there are two life insurance plans that you can purchase separate from the plan that your employer might provide. Term Life Insurance and Permanent Life Insurance.
Term life insurance is your simplest option. With term life insurance, you buy a policy for a set length of time. This is known as the term. Coventry says, ”you choose how long you want the policy to last and the level of coverage. When the policy goes into force, you’ll begin paying premiums. Most life insurance companies allow you to pay monthly, quarterly, or annually. There may be discounts available if you pay your premiums annually, in advance.”
Then, there is Permanent Life Insurance. With permanent life insurance, the length of the policy is for life. There are three main types of life insurance that fall under the category of permanent life insurance: traditional whole life, variable life and universal life. As the name suggests, this kind of policy remains in force as long as the premium payments are up-to-date.
- How much coverage do you need:
You never want to underestimate the amount of life insurance coverage you will need. It is good to assess how much money would be needed to pay off debt, but also how much would be needed to help a spouse, support children, etc. You should consult a financial advisor to get an idea of your financial situation and what you will need. Forbes has a calculator that could help you get an idea of what you might need.
- When should you purchase life insurance:
You will get the best rates when you are still in “good” health. It makes the most sense to buy when you are still young and have good health, but after you are married or start having dependents.
- What is the cost of life insurance:
According to thebalance.com, life insurance costs vary on the type of plan you have and how much the death benefit is. Costs can be as low as a few dollars a month or as high as several hundred. A life insurance professional or financial advisor can help you decide how much coverage you will need. They can also recommend ways to keep your monthly or yearly costs down if you are worried about paying too much in premiums.
Life insurance isn’t the same for everyone, you need to do your research and pick the right plan for you and your family. This article should get you started on what to look for when picking your plan.