5 Factors To Consider Before Buying Life Insurance

April 4, 2023

Buying life insurance can be tricky the first time around, and there are many factors to consider. There are different types of policies as well as coverage options. You might feel the time is right, but you are still determining what to consider before getting life insurance.

The 5 Things to Think About Before Buying Life Insurance

Here are five factors that directly affect your policy investment.

Know What You Need Life Insurance For

Before calculating the proper policy benefit, you need to consider your motivations. Do you have debts to pay off, such as a mortgage? Consider your anticipated payoff and any educational funds, inheritance, funeral costs, and family support that your policy benefit should cover.

Understand the Policy Types

When looking for a life policy, consider the different types and decide which one suits your current needs. Term life policies stay in effect for a predetermined time. For example, a 30-year term policy is valid for 30 years. Beneficiaries receive the death benefit if you pass away anytime in those 30 years. These are usually more affordable solutions and ideal when covering a mortgage or other significant but term-defined liabilities.

Whole life insurance policies are valid for your entire lifespan as long as you pay the premiums. Some whole-life policies even have cash value. In some cases, the policy earns enough to cover your premiums.

Determine How Much You Can Afford

Evaluate your budget and determine how much you can afford to pay in premiums for your policy. Remember that your policy premiums depend on many factors, including the type of policy you choose, your current health conditions, the life insurance face value, and your career. Working in a high-risk industry might affect your premium costs because it increases your risk factors.

Explore Your Life Insurance Requirements

Every life policy has underwriting rules that will be applied depending on your gender, age, height and weight and other health issues. Depending on these factors you may or not require a medical exam. Also, the more medical issue you have the higher your premium may be.

Research the Life Insurance Company's Claims History

The claim payment history of the insurance company is an important consideration. When you buy a life policy, work with a trustworthy company. Make sure the company keeps a low ratio of denied to approved claims. It helps ensure your loved ones receive the benefits you intend for them.

Investing in the right life insurance policy makes a big difference in the peace of mind and financial stability that your loved ones have after your death. Your life policy can cover your outstanding debts, pay for your funeral services and replace your income for your family while they grieve and adjust to the changes in their lives after your death. Consider these elements as you choose your policy.

About 1891 Financial Life

At 1891 Financial Life we don’t just sell policies, we offer possibilities. We pride ourselves on giving back to the communities that we serve by providing quality and comprehensive insurance solutions. We are a not-for-profit life insurance Society, which means the sales from these financial service products help fund member benefits along with social, educational, and volunteer programs designed to respond to community needs.

Our portfolio is extensive, ranging from various life insurance policies to our annuities to support your financial needs no matter what stage of life you’re in.