There is more to life insurance than just walking into an insurer’s offices and buying a life policy. You need to know a couple of things to help you end up with the most appropriate cover to meet your needs. While your agent may give you the required information when filling the proposal form, here are some of the things he or she might not tell you.
You Require a Higher Death Benefit than You Think
A $ 500,000 cover may sound way too overboard, but if you are married and have kids who aspire to join a reputable college in the future, $ 500,000 may not be enough if you want them to maintain the same kind of lifestyle they are used to. While the life insurance cover you take depends on your salary and whether your spouse works or not, your children need to be taken care of in case of an accident and so is the debt that you may leave behind.
Life Insurance Comes in Several Packages; Choose the One that Fits You Best
There is Term Life Insurance and Permanent Life Insurance, all offering different benefits. Term insurance covers you for a specified period, thus you need t keep renewing it after expiry. Term may be a good option if you cannot afford permanent insurance. Permanent Insurance covers you as long as you are paying the premium. Term is divided into a whole, universal and variable, all offering you different investment options and the chance to use your cash value for payment of premiums. The primary difference between term and permanent insurance is the cost, thus you should go with what your budgetary allocations allow you to.
Look for Guaranteed Level Premiums
Given the uncertainties of life, you may not be in a position to tell what the future holds for you. However, it is very logical to say that if your premiums increase over time, you might have a hard time paying the premiums. If you fail to pay the premiums, your policy will lapse thus it is imperative that you go with guaranteed premiums. In other words, go for a policy that you can be able to pay over time.
Keep Reviewing the Policy Over and Again
Your life insurance needs will change as your life changes. At one point you are married; the next times divorced and have kids along the way. During such major events, your insurance needs change and so should your life insurance policy. Considering that life insurance does not pass through a will ensure that the insurer known who will get the death benefit.
