If you are in the market for life insurance and you want to protect yourself, your family or anyone who is financially dependant on you then you are not alone. In 2015 only, 132 million Americans relied on life insurance to protect their financial security. However, purchasing Life Insurance can sometimes be both intimidating and confusing due to many options and resulting questions. Thus, we created a list of things you need to consider before making your final decision about the purchase.
The Purpose: Why do I buy this?
The first thing you need to understand is the purpose of your purchase. Are you buying life insurance to protect your family in case of an early death? Do you have additional debt that requires you to provide coverage? Are you thinking of leaving an inheritance to a charity? These are the questions you need to ask yourself before actually buying the product.
The Market: What is available?
When buying Life insurance, some people get confused by the various options, and they buy whatever seems the best at first sight. However, before making a final decision, you need to make sure to know what is available and what you get. Take time and do a research about the insurance you consider to buy. Also, you can always contact an insurance agent to ask questions and get complete information about the product you buy.
The amount: How Much Life Insurance Do I Want?
The amount of life insurance you want depends on various factors such as your current financial obligations including your mortgage, debt, and childcare. You should also consider your family’s future needs or goals, including educational expenses and retirement funds. These factors can help you determine the type and the length of coverage you consider to be right for you and your family.
The Policy: What is the best policy?
There are two basic categories of life insurance you can choose from; those are Term and Permanent Life Insurance. Generally, with term policies, you choose the length of time and the amount of coverage. As for permanent policies, they usually offer lifelong protection (as long as premiums are paid) and may allow you to build cash value. Depending on your circumstances and financial goals you can understand which type of policy may better suit your needs.