Things to Consider Before Buying Life Insurance
January 10, 2023
There are many factors to consider before buying life insurance, and you must think about them beforehand. Shopping for life insurance can raise some tricky questions — what will happen to your family if you pass away? How can you continue providing for them? Luckily, life insurance also offers answers to these questions. Investing in life insurance is one of the most reliable ways to provide your family with financial security if something happens to you.
What to Know Before Buying Life Insurance
Before you buy a policy, you need to review a life insurance checklist. It will help you know what to consider when buying life insurance.
There Are Different Types of Life Insurance
The first fact you should understand about life insurance is that there are several different types to choose from. You will likely see common options: term life, whole life, universal life, and variable life. Some types of life insurance only cover final expenses, but this offers very little financial security to beneficiaries. Term life is a temporary form of coverage that only lasts for a specific period. Whole life, universal life, and variable life insurance are all permanent.
You Need To Choose a Policy You Can Afford
When looking for the right life insurance policy, choosing the coverage that offers the biggest payout to beneficiaries may be tempting. You want your loved ones to avoid financial stress, but that shouldn't force you to deal with financial stress in the meantime. It's essential to choose a policy with a monthly premium that you can afford. If the premium is outside your budget, you will struggle to make payments, which could cause you to lose coverage altogether if premiums are not paid.
Determine How Much Coverage You Need
While calculating your budget for coverage, you should also consider how much coverage you need to invest in for your family. Consider potential expenses such as college tuition, medical care, salary replacement, and general expenses. As a general rule, you should invest in coverage that is at least six times the gross sum of your annual salary. If your family faces the possibility of unusually high expenses, you may need coverage that's as high as ten times your salary.
Decide Who Your Life Insurance Beneficiaries Will Be
Finally, you need to determine who you will designate as the beneficiaries of your life insurance. It is a difficult decision, but it will determine your family's future. Some people choose to designate their children as a beneficiary, which can be a good decision if your children are legal adults. If your kids are still under 18, naming them as beneficiaries can trigger a complex legal process that delays the disbursement of the policy's benefit.
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 MYGA to support your financial needs no matter what stage of life you’re in. For more information, contact us at (855) 804-7424.
Find out how one policy can make a powerful impact.