Life insurance can be one of the most important financial purchases of your life (and your heirs’ lives), so let’s review some common dos and don’ts for purchasing this important policy.
DO: Understand why you need life insurance. When buying life insurance, most people think about their own financial responsibilities, such as covering their mortgages.
It may be better to take a broader view and think of life insurance from the perspective of the loved ones you would be leaving behind. What will they need to obtain financial stability when you are gone?
DON’T: Buy too little life insurance. Sometimes people buy too little life insurance because they purchase it from an automated system (such as an employer, which offers a multiple of your salary in life insurance). To avoid this mistake, it is advisable to work with an experienced agent to carefully calculate your life insurance needs.
DO: Buy the right kind of life insurance. There are hundreds, if not thousands, of life insurance products on the market. The differences can significantly affect your beneficiary should you pass away.
At a minimum, understand the difference between term life insurance policies (which cover your dependents for a specific time period) and whole life insurance policies (which cover your dependents for your entire life). Keep in mind that there are many other nuances that are important to understand as well.
DON’T: Get overwhelmed. All of these nuances can make the purchase of life insurance overwhelming at times. So, when you decide to purchase a life insurance policy, it is always advisable to find an agent who understands your unique needs and can guide you through the selection process.
DO: Ask for help. It is a good idea to seek out the assistance of a professional who knows the ins and outs of life insurance. Please reach out to us if you need help. We can review your future goals and establish a solid policy to meet them.