Life insurance policies can be a confusing subject for people. For some reason, it’s not the type of thing that gets discussed much at cocktail parties and happy hours.
Perhaps it’s the morbid thought of having to contemplate your own absence, or it’s uncomfortable for the people who have remained uninsured.
Either way, we’re not afraid to talk about it. Below are our four tips on how to make your life insurance purchasing decisions! These are the things that we’d recommend taking a look at, when you’re thinking about these powerful financial products.
Understand What Term Insurance Is
Term life insurance issues for a limited term of time, and rarely extends beyond 75 to 80 years of age. Some life insurance policies have payments that are level throughout the life of the contract, but payments for most of them increase with your age.
Make sure you look at the projected costs of proposed term insurance coverage, especially in the later years of your life when you might need it the most!
Some term insurance policies can be converted into the second type of life insurance policy you’ll want to study, which is next.
2. Understand Whole Life Insurance
Whole life insurance is a bit more complicated than term insurance, and it’s almost always substantially more expensive. But that’s for good reason: you get to keep this kind of policy forever, and it builds value similar to any other equity-style asset such as stocks or bonds.
There are rules and restrictions when it comes to getting access to this money, though, and you’ll want to read up on whole life insurance policy functions before you make your final decision on what types of coverage you want for yourself and your family.
3. Understand The Different Types Of Payment Structures
Whether you choose whole life or term life insurance, make sure you understand exactly what the payment structure will be. If it’s level, get that in writing in your contract, so costs don’t get exploited later!
4. Compare All Your Offline Quotes Against Online Comparison Sites
There are a few great life insurance comparison sites that will list competing rates and policies quickly and accurately online. That’s a great way to know how good a deal you’re getting from your local agent.
In many cases, you may save a significant amount of money (with no loss of coverage quality) by purchasing your policies online.