Are you considering a term life insurance policy? If so, it’s important you do your homework to ensure that you get the policy you need.
Here are six questions to ask before you sign on the dotted line.
What are your income needs?
It’s important to consider your family’s income needs over the course of your policy, including expenses such as mortgages, college tuition, medical bills and funeral costs.
What length of term do you want?
The length of your term will depend on your long-term income outlook. For example, if you’re working for 10 more years and then have retirement benefits and Social Security, a 10-year term may work for you.
Can you convert the policy?
If you outlive your term life insurance policy, you may want to convert it near the end of the term without needing another medical exam. Be sure to read the fine print on the conversion option, as there can be time limitations for conversion.
What other benefits do you want?
Riders – such as disability waivers that pay your premiums if you become disabled – are more common on whole life insurance policies than on term life insurance policies. But they are available, so look into them.
How applicable are advertised rates?
Even if you’re relatively healthy for your age, the rates promoted in online or newspaper ads may be based on an applicant with exceptional health. The price quoted may not be applicable to you.
Is the insurance company stable?
Life insurance companies are usually in excellent financial health, but you should still check out their rating. Agencies that rate life insurance companies include A.M. Best Company, Fitch Ratings, Moody’s Investors Service and Standard & Poor’s Ratings Services.