Life insurance can be an important component of a financial plan, but it’s important for you to do your homework to ensure that you get the policy you need.
Here are 10 questions to ask yourself:
Do you need life insurance? The primary purpose of life insurance is to protect the people you leave behind – your spouse, children, or others who depend on you.
Can you get coverage? Be upfront when applying for coverage: If you don’t, your claim may be disallowed, and your loved ones left with nothing.
What kind of life insurance is best for you? Pure term policies aren’t investment vehicles – you pay a premium, and the policy pays your beneficiaries a certain amount when you die. Whole polices combine term policies with an investment product, and build cash value.
How much do you need? Consider your family’s income needs over the course of your policy. This includes expenses such as mortgage payments, college tuition, medical bills, and funeral costs.
How much can you afford? Many people who buy whole life insurance often buy too little, leaving themselves underinsured.
What length should your term be? The length of your term will depend on your long-term income outlook.
Do you want any riders? Disability and other waivers are available; be sure to look into them.
Can you to convert the policy? If you outlive your term life insurance policy, you may want to convert it near the end of the term so you won’t need another medical exam to qualify.
Is the insurance company stable? Life insurance companies are usually in excellent financial health, but you should still check out their rating.
Do you know how to shop for insurance? Of course, you can buy life insurance on the Internet, but for a policy that’s tailored to your needs, consult your insurance advisor, who is familiar with your financial situation and your goals.