The Secret to Selecting the Right Kind of Life Insurance

Selecting the right kind of life insurance is important for anyone ready to make this financial step. As with all things regarding your financial life, the person who can give you the best advice is you. You may think that you are unqualified to understand the particulars of life insurance policies and payouts, but with a little research, you’ll know more than you may ever have dreamed possible.

Here is some of the best information to help you start learning now:

Figure out just how much life insurance you need. A good rule of thumb is to take the yearly income that you currently live on and multiply it between five and ten times. Those with children or other dependents, as well as other debt, may want to apply somewhere nearer 10 times the amount.

Consider buying term, not whole, life insurance. Most term policies are renewable, but most insurance companies make more on whole life plans, even if they are not necessary for their customers. However, sometimes a whole life policy will be exactly what you need. Again, understand your own needs before you have your first meeting. Even half an hour of research can give you enough perspective to be a much more informed buyer.

Meet with multiple people. Private brokers can help you understand what is best for you, without trying to sell you anything. Having meetings with different insurance companies, too, can help you understand the range of possibilities for your account.

Know the fine print. Ask your provider the hard questions about all the particularities of your account (accidental death, exclusions). You don’t want you or your loved ones to be caught unawares in a time of crisis.

Don’t pay for expensive add-ons and riders unless you really need them. Very often, these riders just make more money for the insurance company, while providing little value for the client.

Make sure you get and take advantage of a 30-day cancellation window. During this time, make sure you review the terms so that you understand every aspect of your policy. If you find, problems, you can cancel during this time.

Don’t try to replace old whole life policies. If you have purchased these policies in the past and find that your needs have changed, just buy more life insurance. There are fees and needless complications associated with old policy cancellations. It is much simpler to get more insurance on top of what you already have, and there is no penalty for doing so.

With so many life insurance providers available, finding a reputable ally in the field is a must; the help they’ll provide can give you peace of mind, knowing that your loved ones are well taken care of, whatever the future holds.

Photo Credit: David Hilowitz