Buying life insurance is a great decision, but all policies aren’t made equal. A lot of deliberation comes into play when settling on the right policy type and coverage level for your loved ones. With so many providers, prices and options to consider, the process can quickly become overwhelming. You may decide to work with a life insurance agent who creates custom packages on your behalf, or you can shop online and buy a policy yourself.
When you choose to buy life insurance online, you can often find great coverage without a medical exam. You also get to compare free life insurance quotes from multiple providers.
This gives you the greatest level of freedom and flexibility over your policies. Protecting your dependents’ well-being is the most important thing, but you also have to consider the impact of premiums on your budget. Someone in good health will be paying for coverage for years.With thousands of dollars in question, there are some important factors to consider before you buy. If you’re in the market for life insurance, ask yourself these five questions. They’ll help you navigate all your online options more easily and find the right arrangement for you and your loved ones.
1. How Much Life Insurance Do I Really Need?
This is a question many people wrestle with. Large death benefits can be a great way to leave a legacy for your family, but it doesn’t come cheap. If you want a death benefit of $1 million or more, you should expect to spend at least $2,000 a year in premiums. You have to consider your future assets and the cost of maintaining them after your passing when choosing a death benefit. Someone with no dependents or adult children who are financially secure likely won’t want to pay for so much coverage. Instead, you may want a policy that covers any outstanding debts you leave behind, pays for funeral costs and leaves a little something to your loved ones.
If you have multiple dependents, including a partner/spouse and children, then you have to consider the impact of the benefit on their futures. If you are the primary earner in your household, you will want greater coverage to protect your family in the event of your passing. A guide online can help you calculate how much life insurance you really need.
When you strike the right balance, you get the perfect level of coverage for the best price.
2. Do I Want to Use This as a Form of Investment or Personal Security?
People buy policies for different reasons. Some only want to invest in a whole life insurance policy so they can sell it later and fund their retirement. Others just want to have peace of mind that their loved ones will be taken care of or that their debts won’t become a burden to their family after they die. Both are valid reasons to buy, but the type of policy you purchase will be heavily impacted by your ultimate goal for obtaining coverage. If you want to sell your policy later, then you’ll want whole or permanent coverage.
Permanent and universal life insurance policies generate a cash value. Variable policies invest in stocks on your behalf. Those who do not need a large death benefit will do better buying a temporary policy. These do not generate a cash value, so they exist solely for the interest of the beneficiaries. Temporary polices tend to start at 10 years and can go up to 30.
3. What Are My Options for Selling This Policy in the Future?
What age do you have to be to settle your life insurance? Many providers set the minimum age at 65, but there are also third-party buyers that will buy your coverage as long as it has a certain cash value. You’ll also need to have a life expectancy of at least 20 years in most cases. But in the event you receive a terminal diagnosis, you have options.
Permanent or whole policies can be sold via a viatical settlement. Viatical settlements allow people with short life expectancies to sell their policies to cover medical expenses, living costs and palliative care. You can learn everything about what a viatical settlement is and how to estimate the value of your policy from this site here and review an available guide.
4. Does This Offer Enough Coverage for My Family’s Future?
When you’re comparing coverage, think about balancing the budget and how your family’s cost of living will change over the years. From housing to college costs and student loan debt, there’s a lot to consider when you think about how much money you want to leave behind. Generally speaking, it’s best to buy a policy that covers your family for at least a year after your death. Doubling your annual salary and factoring in additional costs will help you project how much you really need.
Make sure that you carefully compare quotes to get the best deal. Some providers may allow you to even change your temporary life insurance to permanent. This could be a valuable form of investing that allows you to budget today and invest more in the future.
As your family grows, you may think about upgrading your coverage limits for a reasonable cost.
5. Is This Policy Affordable if My Family Grows?
If you plan to have children, then you will have to add them as beneficiaries and consider how this affects your death benefit. Adding beneficiaries to life insurance is a straightforward policy, but it can affect your bottom line. You should investigate each provider’s resource center to see what options they have. Customer service is extremely important, and you want to go with a company who is happy to help you modify your policy whenever you need to.
Adding a member to the family will also increase your monthly costs. If you are paying more to maintain your household, a premium may become a costly expense. Family planning should include considering the impact each child has on your budget and life insurance. Long-term planning protects everyone’s future.