New to life insurance? We take you through what you need to know.
Congratulations! You’ve decided to buy life insurance. Not only have you made a valuable investment for your family, but also for your finances. Even though you know you need coverage, it can be daunting to know where to begin. There is complex terminology, different policies, and calculations to consider. To help you get started, read on.
Find the right type of policy. Many first-time buyers think that all life insurance policies are the same, which can be a costly misunderstanding. The two main types of policies are whole and term.
Whole life insurance covers you until the day you die. Your beneficiary will receive your death benefit once you pass on. Term life insurance only covers you for a specified period of time. If you outlive a term life insurance policy, it expires and nobody receives your death benefit. At this point, you will either purchase another term policy or do without.
Acquire the correct coverage. Along with the type of policy, you will need to consider how much coverage you need. Some experts suggest your death benefit be at least six to eight times your annual salary. Consider your monthly costs, and how your spouse and family would survive without your income. The best way to get the right coverage is to discuss it with your family and your financial advisor.
Locate the company. Since many consumers think that all life insurance companies are created equally, they buy from any insurer at the given price. Simply put, a life insurance policy is only as good as the company that you buy from. Get quotes from a couple of different insurers and talk to the agents about how they can best help you!
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