Top 10 Tips to Know About Life Insurance
Posted on Tue, Mar 01, 2011
Life insurance gives you the opportunity to protect your family now and in the future. It’s a way to provide them with financial stability if an unexpected death should occur. Nowadays, many people research before they buy. The same is true for insurance. It’s important to understand what type of life insurance best meets the needs for you and your family. Here are tips to help you better understand your options when shopping for life insurance.
1. Stay Healthy
All life insurance policies are subject to medical underwriting- that means the healthier you are the cheaper your rates will be. Get in shape, eat right, and quit smoking, not only will you live longer, you’ll pay less for life insurance.
2. Honesty is the Best “Policy”
Never lie or misrepresent the information on the medical questions on a life insurance policy application. If you are caught, your policy will be cancelled and you could be barred from ever purchasing another policy again, even from any other carrier. Additionally, you may be subject to criminal prosecution for insurance fraud.
3. Buy Young
When you are young and healthy, the last thing you may be thinking about is buying life insurance, but that is actually the perfect time to think about it. Rates for life insurance are cheaper the younger you are when you purchase your policy.
4. More is Less
In life insurance the “cost per thousands” in coverage gets progressively less as you increase coverage. In other words if you pay $500 a year for a $250,000 term life insurance policy – you won’t pay $1,000 to double the coverage to $500,000 – in fact it usually is only a few dollars more per month.
5. Know The Difference
Understand the different types of life insurance, such as term life, whole life, and universal life. Each is designed to fit different needs and different lifestyles. Get to understand the differences, and you will know which is right for your stage of life.
6. Be Aware of Payment Discounts
Before you commit to paying for your life insurance premiums monthly, see if your life insurance provider offers a discount for paying annually, many times they do.
7. Review Existing Coverage
If you already have a life insurance policy, it is important that you periodically review your coverage. Life situations change and so do life insurance needs.
8. Make Sure You Have Enough Coverage
Just having life insurance coverage isn’t always enough to make sure your family is fully protected in case of your death. You have to make sure you have enough converge so that the death benefit will provide for all of their expenses without the benefit of your income.
9. Don’t Rely on Insurance Through Your Job
Some companies offer life insurance as a job benefit, but these policies are usually just based on your salary, and are woefully inadequate to rely on as your only life insurance policy. And, of course, such policies are tied to the job and will not be in effect if you leave that place of employment
10. Shop Around
Like the purchase of any kind of insurance, it pays to shop around when looking for life insurance. An independent insurance agent represents a number of insurance companies, and can research with these firms to find you the best combination of price, coverage and service.