Things To Do Before You Buy Life Insurance

Things To Do Before You Buy Life Insurance

Before you buy a life insurance policy you should ask questions.   That sounds logical, after all you are making a committment to a monthly premium payment.   You should know what you are signing up for before you make that committment.

But if you have never bought a life insurance policy before you may not be too sure about what questions you should ask.   Let’s look at some of the questions you may want to think about before making a financial committment.

Why Buy Life Insurance:

Determine why you need life insurance.   We all have different financial needs; determine yours before you buy.  If you know why you need life insurance you will be more likely to buy the right type and the right amount of coverage.

  • Family obligations?
  • Financial responsibilities?
  • Protection?
  • Investment purposes?

The Different Types of Life Insurance Available:

  • Term Life Insurance Policies.
  • Cash Value Life Insurance Policies.
  • Term life insurance is less expensive than cash value life insurance policies.
  • Term insurance does not build up cash value.
  • Term insurance is pure insurance.

What’s The Best Type Of Policy for You:

Different stages in life require different types of life insurance policies.  Before you buy a policy determine which type of life insurance policy best fills your needs for you and your family.

Your Children

  • When you are young or your children are young, a whole life insurance policy is very inexpensive.
  • The value of a whole life policy is the accumulation of cash value over time.
  • Many parents buy a whole life policy on their children when they are first-born.
  • The cash value on a whole life policy accumulates as the child grows up.
  • The child can then use the cash value someday for college expenses or maybe even wedding expenses.

Your First Home

  • When you buy your first home or get married, a term policy may be best.
  • Term life insurance does not build up cash value, but you can buy a large amount of insurance for a relatively low-cost.
  • To cover a mortgage you need a large amount of insurance; you don’t care about cash value.
  • You should ask your life insurance agent if you can convert the term policy to a cash value policy in the future.
  • If you are allowed to convert the policy, you generally do not have to go through the entire underwriting process again.

How Much Coverage To Get:

  • You could guess on the amount of life insurance coverage that you will need.
  • You could get a professional calculation on the amount of life insurance coverage you will need.
  • When it comes to life insurance, one size does not fit all.
  • The amount of life insurance depends upon your financial responsibilities.
  • If you really want to know how much life insurance you will need to cover all of your financial responsibilities, ask your agent to prepare a  financial needs analysis for you.
  • This analysis will help you determine the appropriate amount of life insurance that you will need in order to meet all of your financial obligations today and into the future.
  • You don’t have to buy enough life insurance to cover all of those financial obligations, but at least you will know.
  • You can buy a little at a time.
  • You can buy enough life insurance to cover the larger expenses; maybe enough to cover the mortgage.

Your financial obligations are your responsibility.  Life insurance can ease the burden of covering your financial obligations.   Make the call.  Call a life insurance agent or go online to get some life insurance quotes, you may be surprised how inexpensive it is.


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