Top 10 Things to Know
About Life Insurance
Life insurance can be a great way to get protection for now and to plan for the future. After all, we want to make
sure that our plans and loved ones are taken care of if we die. Doing research ahead of time helps you get the best
possible coverage at the right price. Here are some helpful facts and ways they can help you.
1. Shopping around can save money
As with most insurance, when it comes to life insurance, it pays to shop around because premiums can vary widely.
And thanks to the Internet, it's now easier than ever. From research, to quoting, to buying a policy, there's never
been so much information available. Even if you need to speak to an agent or company, shopping on the Internet first
can make your discussion more efficient.
2. Having enough coverage is crucial
If you need life insurance enough to buy it, you also need to make sure you're not underinsured. It's important not to
have too little coverage, because then you won't get the benefits you need. If you don't think you can afford life insurance,
explore your options, because it's often cheaper than you'd expect. However, if you can't afford all the insurance you need right now,
start with a smaller amount. You should be able to buy more at a similar price when you can afford it.
3. The healthier you are, the better the rates
It's true - healthy people get better rates on life insurance. You will be asked to pay a higher rate for anything that shortens your
life expectancy (e.g., smoking, taking regular prescriptions, engaging in risky activities, and being overweight). Consider what small
lifestyle changes you can make that will improve your health and possibly your rates.
4. Buying sooner rather than later can help
If you've been putting off purchasing life insurance because you don't want to pay the premiums, you may be doing yourself a
disservice in the long run. The younger you are when you purchase life insurance, the lower your premiums will be. In addition,
it's harder to get life insurance if you have some of the conditions that come with growing older.
5. It's important to regularly review your coverage
The end of one year or the beginning of the next is a good time to examine your insurance needs. Any life change signals the need
for a review of your overall financial plan. When it comes to life insurance, you'll want to make sure your coverage still matches
the changes you've made. Marriage, the birth of a child, and impending retirement can all have an effect on the insurance you need
and the coverage amount that's appropriate.
6. There are different types of life insurance
Different types of life insurance have different characteristics and are intended to accomplish different things. For instance, term
life insurance is generally designed to provide the maximum amount of protection for the smallest premium dollar, but only for a set
period. On the other hand, cash value life insurance offers benefits for your entire life and an investment and savings component, although
at a much higher cash outlay. In the majority of cases, for pure protection, term life insurance is the better choice.
7. You might pay more by choosing monthly premium payments
You may not realize it, but your life insurance might cost more if you pay your premium in monthly installments. Many insurance companies
offer a discount if you pay your premium annually rather than monthly. Although the overall cost and benefits of the policy are more important
than getting a discount, you might get a lower price by paying annually.
8. You shouldn't rely solely on the life insurance offered by your employer
Many employers offer their employees group life insurance. However, this coverage is usually not enough to adequately meet your life insurance needs.
More importantly, group life insurance policies from your employer are not portable, meaning that if you leave your job, you lose your life insurance coverage.
9. You should tell the whole truth and nothing but the truth
If you lie or omit information on a life insurance application, your life insurance company may be able to terminate your coverage. They may
also be able to charge you for the higher premiums you should have been paying, or deny claims. For this reason, make sure to answer all questions fully.
There are many different life insurance companies, and even if you don't qualify for the best rate from one of them, you may still be able to get a good
rate from another.
10. Buying more can be cheaper
Life insurance usually costs progressively less per thousand dollars at higher coverage amounts (e.g., $250,000). That means doubling your coverage
generally won't double your premium. If your life insurance needs increase, be sure to explore your options. It may not cost as much as you think to buy more coverage.
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