Buying life insurance can be scary. Especially if you’ve never done it before. Here are some quick tips to help you make smarter policy decisions.
[Editor’s Note: This blog was originally published on August 19, 2013. The content has been updated.]
Today, many families don’t have life insurance or don’t have enough and some think the product is overrated. Because many of our decisions are prompted by our peers, we’re more likely to think life insurance is unnecessary if a friend, family member or colleague thinks so too. Our society has long relied on the shared knowledge of groups to make wise decisions.
So where might these shared decisions go wrong?
When we realize that life insurance is a very personal product. Most people use these “rules of thumb” indicators when it comes to buying a policy:
- Some people say you should buy life insurance when you are young to get benefits, like low premiums that remain level for the rest of the term of coverage
- Others like to say you should have 8 to 10 times your salary in coverage
- Still others say that whole life insurance is a waste of time and money…and you’d do better to invest in other things with less risk or higher returns
Rules of thumb may have worked in the past, but in an increasingly changing world where finances are shape-shifting with every new bend in the economy, these rules of thumb are not reliable anymore.
If you’re thinking of buying coverage, make sure you do it right: Right for you, right for your family, and right for your pocket.
First, talk to a licensed agent and run through a complete needs analysis. Ask yourself why you’re thinking of getting covered, and who you would want to protect in case of your death. Answering these questions as clearly as possible helps define the search for adequate and affordable coverage. It helps you make wise choices when it comes to the key components of a policy…what type of coverage you want (term or permanent), the face amount (amount your beneficiary will receive), and the length of coverage.
Second, you’ll want to take some time to think about your family’s needs for life insurance. People often think that life insurance is only for the breadwinner of the family. But what about the stay-at-home mom? Or the mom who works part-time to supplement her family’s income? Her value is priceless but if you were to actually put a price on all the services she provides for her family, you’d soon realize it adds up to oodles of money. You may need to hire a housekeeper, a nanny, a tutor or place your child in a daycare center. Life insurance for a stay-at-home mother can help cover those expenses.
It’s good to consider life insurance for your children as well. Buying a life insurance policy when they’re young would make sure that they are covered in the future…even if they develop health problems later on in life which would, otherwise, make them uninsurable.
Third, get free quotes while you can. AccuQuote is among the leading industry quote generators in the life insurance industry. We never pushes one life insurance company’s products over another. We’re not married to one carrier, so you’re sure to get an unbiased and real comparison of quotes.
Getting a quote can help you prepare for the actual buying process. For example, if you smoke and your premium ends up being expensive because of it, you can plan on getting interim coverage while you get on a serious plan to quit. You can then reapply in a year or two for lower rates and a longer term life insurance policy.
Empower yourself with knowledge that will help you make an educated decision. Your peace of mind and the security of your family’s financial future are worth your time.
For more information on life insurance, talk to AccuQuote. We can provide quality, competitive life insurance quotes from the top-rated, brand-name insurance companies you know and trust.