Smart Considerations When Shopping for Life Insurance

Smart Considerations When Shopping for Life Insurance
  • Opening Intro -

    A life insurance policy can offer protection to your family, providing your spouse and children with the funds needed to maintain their lifestyle after your die.

    Without such a policy, you could doom your family to a lower financial position, perhaps impoverishing them as your surviving spouse seeks to make ends meet.

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Life insurance isn’t for everyone and there are different policies available. Read on for some smart tips on shopping and buying life insurance.

Determining a need — Not every adult needs life insurance. If you have no dependents, then this can be a senseless cost. Life insurance is typically favored by couples especially those with young children. Older couples can benefit as well as the surviving spouse can be financially protected when the other one dies.

Term v. whole life — What type of insurance do you need? Term is cheaper as it is for a set period of time, such as for 10 or 20 years. Whole life stays in force for the rest of you life, guaranteeing that your heirs receive compensation as long as your policy has been paid up. Term is more expensive if you buy it later in life; whole life is more expensive in the early years as it builds up a cash value. Overall, you’ll pay more for whole life insurance.

Choosing the right amount — How much life insurance you need is a subject of debate. As Smart Money notes, many of us have too much insurance because a “fast-talking sale rep” convinced us of such. A rule of thumb that you should purchase insurance equal to 10 times your current salary may not be sufficient for your needs. Instead, use the Smart Money life insurance worksheet to determine what you need.

Shop for a policy — You’re ready to look for a life insurance policy, but where do you start? A good place to go is to the person who handles your other insurance needs such as your medical and dental insurance agent or your homeowner’s and auto insurance agent. Barring that, you can search online for insurance, visiting sites such as Select Quote, Matrix Direct and Insure.com to obtain a quote.

Final Thoughts

If you need insurance, don’t put it off that off any longer. As you age, your term life insurance rate will increase, perhaps making it more difficult to secure a policy to protect your loved ones. While you’re at it, update your will too.

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