Life insurance is, well, life-saving, given that it can protect your family in the event that you die prematurely. But let’s face the ugly truth: life gets in the way of having all your ducks in a row. The truth is, you can get a quality life insurance plan without paying an arm and a leg. And while it may seem daunting to shop for life insurance coverage — especially if you aren’t familiar with the process.
Here are some tips and pointers to make the process more convenient and less overwhelming.
Determine if a Term or Whole Life Insurance Policy Is the Better Choice
Before purchasing life insurance, decide if you need term or whole life insurance. Understanding the differences between these two popular types of life insurance can help you decide which is right for you. Term insurance is essentially a pure life insurance policy. It does just what you think it should do: provides coverage in the event of your death.
Whole life insurance, on the other hand, also includes a savings component since it accumulates a cash value.
Choose the Right Coverage Amount
The amount of life insurance coverage you opt for is something you’ll want to make with your loved ones in mind. Make sure to take your credit card debt, outstanding mortgage payment, and students into account when deciding the coverage.
How Long Should Your Plan Last?
Most term insurance plans last between 5 and 30 years, so you’ll have to choose a tenure within this range. Keep in mind that the life insurance plan you choose should cover your longest financial obligation. For most people, this would be their mortgage, so pick a term that is either equal to or longer than your mortgage term.
If you opt for a policy term that is too short, buying one in the future after your current plan expires will be quite expensive, given that you will be much older at the time. So, it’s best to opt for the longest-possible term at the time of buying your policy. If you are purchasing whole life insurance, the plan will last for the remainder of your life, so you don’t have to worry about selecting a policy term.
