Do you know how to buy life insurance? Beyond that basic question, do you know the right kind of policy to get, how much insurance to buy and where to find the more reliable sellers of top-of-the-line policies? If you couldn’t answer “yes” to all those questions, don’t feel bad. A recent survey revealed that fewer than 20 percent of working adults know how or where to buy life insurance.
The good news is that buying a policy is not a complex task. Online resources can guide you through the entire process and even lead to directly to experienced agents, the top companies, and the most cost-effective policies for your particular situation.
The first steps include decisions like how much coverage to buy, what kind of policy you need and how much you can afford. Sure, it would be nice if everyone could purchase $5 million in coverage, but if you can’t afford the premiums, it makes more sense to work within your personal budget. The final steps are comparison shopping and speaking directly with agents. Here’s a summary of what you need to know and how to locate the best resources.
Decide How Much Insurance You Need
Experts say you should opt for a policy that provides at least four times your annual salary in terms of total payout upon your death. Of course, you can only get what your budget allows, but that number is a good guideline for most working adults who want to leave their loved ones with enough of a financial cushion.
Permanent vs Term
There are dozens of different kinds of life insurance, but the two main categories are permanent and term. They’re identified by the length of time the coverage lasts. Term policies expire at the end of a set time period, like 20, 30, or more years. Both permanent and term life insurance policies have their place in the scheme of things. Like everything else in the industry, each one serves a particular purpose depending on a client’s needs.
Those who want lifelong protection that never expires opt for permanent protection. In many cases, however, people either don’t want to pay the higher premiums for permanent policies or simply want coverage for a limited amount of time. Neither type is better than the other, but they merely serve different purposes for diverse populations of consumers.
Shop Around and Compare Prices
It’s important to do a lot of price comparison shopping because carriers charge different rates and use their own mathematical systems to determine what specific rates are in a given category. It is equally essential to not make your entire decision based solely on cost. There’s a lot that goes into a life insurance policy. The reputation and reliability of the issuer can be just as vital a factor as price in some cases.
Speak with Agents and Ask Lots of Questions
Once you narrow down your candidates, speak with agents on the phone or in person. Most will be glad to offer a no-obligation quote and short consultation. Write down any questions you have and remember to ask each agent the same things. That makes comparisons easier and more useful.
Article Submitted By Community Writer