There are numerous, big, events in life that make people realize that they should probably take out a life insurance policy. However, just because these folks have recognized the need to cover their funeral expenses, and provide for surviving family members, doesn’t mean that they’re necessarily read to start comparing life insurance quotes just yet.
Here are a few things you need to review before you even consider purchasing a life insurance policy.
Review Your Needs.
One of the biggest things you need to know before you start shopping for a life insurance policy is how much coverage you need. How much earning power do you have within your family? How many dependents do you have? How will they be able to pay for your funeral expenses? For reasons like these, many insurance experts actually recommend purchasing a life insurance policy worth 10 times your gross annual income to make sure the financial effects of your death are covered.
Compare the Different Types of Life Insurance.
There are two kinds of life insurance: term life insurance and whole life insurance. Term is usually more affordable, but will only pay out if you pass away during the period of the policy’s term. This is more suitable to cover short term needs, like making sure your child’s college tuition will be taken care of. Whole life insurance, as you may have already guessed, covers you for the rest of your life, and is more of an investment. The kind of life insurance policy you buy really depends on your current and future financial needs.
Make Sure You Can Afford to Pay Your Life Insurance Policy’s Premiums.
How financially stable are you? Do you have enough cash reserves to afford a more expensive life insurance policy or will you have to sacrifice some coverage? After all, if the premium increases later on, you’ll need to be able to afford it.
Once you’ve taken care of these things, you’ll be ready to start looking for life insurance policies. If you have any questions, feel free to ask in the comments. Research more here.