9 Things to Consider Before Purchasing Life Insurance

Life isn’t always happy-go-lucky – people go through varying life experiences, severe traumas, heartbreaks, and whatnot. However, the most tragic loss one can experience is losing a loved one or considering what will happen to their loved ones and dependants if one’s own self passes away.

While we cannot possibly stop the inevitable, we can take measures to protect our dear ones by lessening their pain and struggle. This can be done by purchasing life insurance for oneself, especially if one has a family dependent on them financially.

While many individuals readily have a number of life insurance policies on their name, many still refrain from buying a policy simply due to the confusion surrounding life insurance and the overwhelming nature of the topic. Individuals looking for an insight into life insurance should visit this page, and listed below are nine things one should consider before purchasing life insurance:

Individuals should assess their current financial situation

People should notice their current financial situation before speaking to an insurance agent to know their finances healthfully. This awareness would help them make conscious decisions about the type of life insurance policy and begin their search accordingly. Individuals also need to consider what they are looking for financially in terms of financial help for their loved ones. 

You should be mindful of the coverage they are looking for

Individuals should estimate how much coverage their family would need in case of their demise. While most individuals obviously take into account any debts or mortgages their loved ones have to pay off, they often tend to forget other important expenses such as child support, spousal support, tuition fees for their children, and any other expenses their family may have to incur to live. Many households follow a rule of thumb while assessing the coverage needed by multiplying the breadwinner’s annual salary by eight times.

You should know different types of life insurance

People who are purchasing life insurance should know the difference between term life insurance and permanent life insurance. The former provides life insurance for a certain time which is essentially ten, fifteen, or even twenty years. The latter, however, gives individuals coverage for their entire life.

Term life insurance is a great way for individuals to get some cushion until they reach a certain financial milestone and attain financial stability in life. Permanent life insurance is a great way to gain this cushion for your entire life but is also more expensive than term life insurance. 

Individuals should be aware of factors that affect insurance rates

Certain aspects of an individual’s life affect their life insurance rates more significantly than others. The two most important factors that are considered are essentially an individual’s health and age. The younger an individual is while applying for life insurance, the cheaper is their insurance rates and vice versa. A person’s age is also supposedly associated with their health.

Individuals should do some research for the best rates

Instead of relying on an insurance agent, individuals should do some research for the best possible rates and look for online and offline quotes. Individuals should get quotes from several insurance companies before settling for one and work with an insurance agent who works independently from all insurance companies. An independent insurance agent would be able to get them better deals and be fruitful in looking for an insurance policy that suits their needs.

Individuals should be prepared for a long process

Individuals should be prepared to enter a long process when hoping to buy a life insurance policy. This is because the application process for a life insurance policy typically involves a lengthy application that includes many questions about the applicant’s weight, age, medical history, mental and physical health, family’s medical history, tobacco usage, and alcohol consumption, etc.

The application also features questions about whether the individual has a dangerous occupation or risks their life due to any dangerous hobbies. This information essentially contributes to the decision of what the ultimate insurance rate would be for an applicant’s insurance policy.

Individuals should not lie on their application under any circumstance before purchasing life insurance

Irrespective of whatever your circumstances are, as an applicant, you should never lie on your application for an insurance policy. This is because insurance policies scrutinize all applications thoroughly. If an individual lies on their application about any matter or under any capacity, insurance companies can always use third-party companies to verify your information. Certain insurance policies also require you to give them access to your medical records, and they can use that access to check and verify your information. 

Individuals should make they can afford the premium payments

Before buying an insurance policy, individuals should make sure that they can afford the premium payments. Many individuals jump into a life insurance policy because paying their regular premium payments could be difficult for them. Especially, if they are juggling through jobs and have a lot of financial responsibilities.

Individuals should read between the lines

Individuals should take the help of their insurance agents and read their policies very carefully for any hidden charges. Certain policies feature the premium to increase each either and cut out the build-up of additional benefits. Certain policies also do not guarantee all benefits that you can claim initially.

Hence, individuals should be very vigilant and read the terms of their insurance policy very carefully. Certain legal language is difficult to comprehend, and thus they should take the help of their insurance agent.

Purchasing a life insurance policy may seem like a daunting task initially, one needs to understand the importance of life insurance for their family and dear ones during the process. Life insurance may be a touchy topic for most, but if one thinks practically, it is a really important one.

See Also: How to Save Money (50 Amazing Ways to Save Those Dollars)

Publisher’s URL: https://financepolice.com/

FAQs

What factors should you keep in mind when getting life insurance?

There are several factors you should keep in mind when getting life insurance: 1. Legit/Safe Company 2. Affordable Insurance premium 3. Interest Rates and returns

How to find a legit insurance company?

Do thorough research on a company before getting their insurance because this is long-term and includes a considerable investment. Ask your friends or close ones if they have ideas about any company.

What is the process to apply for life insurance?

The above article also gives a slight idea of how to get life insurance, but if you have doubts, you could always approach an insurance agent.