People often get nervous about shopping for life insurance because it seems complicated. Thatâ€™s understandable. Sometimes it seems filing taxes may be easier than figuring insurance costs and policy plans.Â The good news is that there are a lot of sources for helpful tips out there to get you through the process, so do your research. Here are some essential questions youâ€™ll need to consider:
Do I Need a Life Insurance Policy?
To start, ask yourself a couple questions. 1) Any chance that youâ€™re going to die someday? 2) If you answered yes, are you single with no debts and no dependents? If thereâ€™s anyone whose day-to-day survival depends on your ability to earn a living, a life insurance policy should probably be on your to-do list. Even if you donâ€™t have a pressing immediate need for it, the younger you are when you buy it, the lower your life insurance premiums are likely to be.
Where Do I Start?
Are you eligible for life insurance as part of your employee benefits? Check out the coverage. It may be limited to only a certain number times your salary, but itâ€™s a place to start. The downside is employee coverage may not be available beyond your term of employment. If you change companies or get caught up in a layoff that coverage may not continue.
What If I Want to Get My Own Life Insurance Coverage?
The first thing youâ€™ll need is somebody to actually sell you a life insurance policy. The Insurance Information Institute has some pointers about finding a life insurance agent. You can also ask friends and family for recommendations. If you like your auto insurer, consider asking them what sort of life insurance options they offer. The SelectQuote team of licensed agents will help you find a policy that works for you and your family. Give us a call at 1-800-279-6192 for your free personalized quote.
Do I Need Permanent (Whole) or Term Life insurance?
Most people choose a term life policy. Itâ€™s less expensive and designed to cover you while your dependents are most vulnerable. For instance, while your children are growing up, youâ€™ll want a bigger safety net than youâ€™ll need when theyâ€™re grown and on their own. Talk to your life insurance agent about the kind of financial responsibilities you want your insurance to cover. If thereâ€™s a reason for you to have lifelong coverage, he or she will help you identify it. Permanent, whole life insurance has its advantages (it can even be given as a gift, believe it or not), but you need to be sure those advantages work for you. A reputable life insurance agent is key to a good decision.
Are There Any Policy Exclusions I Should Know About?
Exclusions? Probably. You may be a mild-mannered CPA during the week, but if you have a weekend hobby like cliff diving or walking the wings of stunt airplanes, you may have an issue. Insurance companies have been known to exclude certain hobbies from policies. The basic rule is, â€œWeâ€™re happy to insure your life, but weâ€™re not taking a chance on you NOT getting killed doing something thatâ€™s inherently life-threatening. If we want to gamble, weâ€™ll go to Vegas.â€ Now, that doesnâ€™t mean you canâ€™t get insurance. Your agent can look into policies that allow you to pay higher insurance premiums to be covered while youâ€™re out living on the edge. (Exclusions donâ€™t have to be dramatic by the way, so ask about them.)
Are There Any Helpful Riders I May Attach to My Policy?
A rider is simply an add-onâ€”kind of like paying for upgrades when you buy a car. For instance, you may want to look into the possibility of having your policy pay off in the event of permanent disability, as well as death. Riders can raise your costs, but a heart-to-heart with your agent can help you decide if the long-term benefits are worth it. Riders are just one way of making sure youâ€™re getting the most out of being insured. Â
All of the above touches on just some of the various things that need to be discussed when youâ€™re shopping around for life insurance, so keep researching your options. Being an aware and informed consumer is important. The benefit of finding a life insurance agent whoâ€™ll build a long-term relationship with you and help you understand how to manage the amount of coverage you carry as your life situation changes over time is invaluable.
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