Life insurance is sometimes overlooked as an important facet of financial planning, but it is a truly versatile way to ensure your loved ones are cared for in the event of your passing. Whether you’re single, married, working or retired, chances are a life insurance policy can benefit your financial plans.
With so many options to choose from, you’ll want to make sure you get the coverage that’s right for you. Here are three things to know before buying your life insurance policy.
1. Coverage Can Be Temporary or Permanent
There are two main types of life insurance policies – term and whole life. Term policies cover you for a specified number of years, typically 10-30, and you will usually be required to sit for a medical exam in order to qualify. Whole life policies, on the other hand, are permanent. They are a life-long option that accrues a cash value over time. Whole life policies are usually more expensive than term policies, but they offer certain advantages depending on where you are in life.
2. It’s Less Expensive Than You Think
Many people fail to purchase life insurance simply because they imagine it to be costly. In reality, term life insurance policies can be incredibly cost effective. A moderately healthy adult in his forties can often get a $250,000 policy for less than the cost of a tank of gas each month. A few of the factors that determine cost are age, health, occupation and level of coverage. You can exercise some control over cost by selecting a moderate coverage amount and adopting healthy habits and an active lifestyle.
3. Independent Ratings are Key
There are many insurance companies to choose from, some with better reputations than others. Since insurance companies are rated by third-party agencies, you can get reliable information on a company’s financial strength and stability, as well as the quality of their customer service. Independent ratings agencies are like a secret weapon to help you select the best insurer for you.
If you’ve been putting off getting life insurance, there’s no time like the present. As an educated consumer, you’re well-positioned to find the insurer and policy that best suit your unique needs.
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