Most of us know that we need some type of policy. Some common reasons people purchase coverage are family security, business interests, or just making sure that our survivors have money to pay for a funeral.
If you know why you need coverage, it will be easier to select the right amount and type.
How much do you need?
Decide how much coverage to buy. If your family is still paying for a home, you may want to make sure they can continue to do that. If kids need an education, you will want to consider that too. You may also want to consider your business, or simply and estate transfer.
What type should you buy?
Thing about the kind of policy you will need. The three types are term, whole and universal life. There are many varieties or policy riders which you can use to customize these too.
Term vs. Whole vs. Universal
Term is usually cheaper, but it ends after a term. Some popular time lengths are ten, twenty, or thirty years. Many term policies do come with a option to covert to whole life before the term ends, so that may be something to consider. You can have the larger face value while you are raising a family or paying off a mortgage. Then, when you are older, you can convert to a smaller whole life policy.
If you want coverage for your whole life, consider one of the other types.
Some people do better by mixing policies. For instance, they may buy a larger term policy while they are younger to cover their home and other future obligations. But they may also add a smaller whole life insurance policy in order to make sure they have coverage in their older years.
Universal life, on the other hand, combines some features of insurance and savings. If you would like to explore the use of a life insurance policy as a savings vehicle, you might want to look into universal. This is the most complex and flexible type, and you will certainly want to do some research before purchasing it.
How to Shop for A Life Policy
In the old days, you would have to call around to compare rates. Since your own rates will depend upon your age, family history, and perhaps the answers to a complex application, this could take a lot of time. I know from experience that many shoppers found this very frustrating.
You will be able to find an easier way to shop for a policy these days. You can find online quote forms which are much simpler to understand. Simply key in your information one time, in the privacy of your home, and then click the submit button. Competitive insurers will evaluate the information and be able to provide you with rates and plans that are tailored to your form answers.
Look for a form that runs on a secure server. Third party verification, like the Better Business Bureau, is also a good sign. You need to compare competitive quotes from multiple insurers.
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