Buying Life Insurance? Use this list to prepare for a meeting with your agent, or look through it for new information to help tailor a policy to your needs.
Below are some “do’s” and “don’ts” to think about when shopping for life insurance:
· Do Not Buy the first thing you get your hands on. The idea behind free quote comparisons is to expose you to several options for life insurance. Don’t blindly believe everything your agent says. Don’t buy a policy just because a friend or family member (or friendly agent) has recommended it for you. Life insurance is not a one-size-fits-all product. Do your research and ask your agent to explain calculations and details to you. Ask them to show you ILLUSTRATIONS
· Don’t forget to look at riders that can customize your policy. From the Return of Premium rider that returns premiums if the term policy comes to an end, to Child and Spouse riders that can cover family members, riders can give you more value per dollar. The Waiver of Premium rider that offers coverage in the event of a long term disability is often offered for free by many providers, so make sure to select it at the time of application.
· Ask yourself what the two most important reasons for buying life insurance are.
If it is to provide coverage until retirement because you already have a great financial plan in place, then you may be better off choosing term life protection.
If you’re in the market for permanent coverage because you’d like to leave behind an inheritance or you’re looking to cover a spouse and/or or child, it may be best to look for a policy with a permanent death benefit, like whole or universal life insurance.
· Quantify your need for life insurance as best as you can. How many family members would need to be supported after your death? Are you hoping that a part of the payout could be used towards college or retirement expenses for your spouse? If you’re on a shoe string budget, what’s the least amount of coverage you’ll need to make sure that funeral costs and any possibly outstanding medical bills are covered?
· Get some quotes first. And do your research. Find out why it’s better to insure with companies rated A- or higher by the industry ratings standard agency AM Best.
· Get free comparisons at websites like AccuQuote so you can start to plan and prepare for the yearly premiums. Find out what method of payment will be best for you- yearly, where you get to pay a lump sum and save on interest, or quarterly payments. Use the services of a reputable aggregator website and compare features in policies.
· Insure your spouse and kids if you can afford it. Replacing a stay-at-home spouse can cost as much as $35,000 per year if you add up the services they provide in child care, meals, household chores and transportation. It’s always smart to at least explore insuring a child. Child riders on parent policies can cost as little as a few cents a month!
Remember, this decision is about protecting your family and securing their financial future, so needless to say it’s an important one. Take your time, get advice and get it right.