What to Know When Buying Life Insurance
There are some milestones in life when it is a good idea to consider buying life insurance. Some of these times are when a marriage, a new home or a child becomes part of your life. Here are some tips that may help make this step easier.
First it is time to assess the needs for life insurance. For instance, look at the protection needed to be sure the home mortgage will be paid, so the family home remains secure in the event of an untimely death. You may want to purchase a paid for life policy. In that policy the premiums are pre-set for a definite number of years, after which the policy remains in force until the insured dies.
Second, buying life insurance at a younger age is dramatically less expensive. A young healthy active person may think life insurance is a low priority when compared with other expenditures. Time passes swiftly and soon it is time to send a child to college. You can use life insurance as an endowment policy to help with tuition.
Life insurance has many options. Besides paying off a mortgage, life insurance can be used to finance major expenses like college, by purchasing a policy that has a cash fund from which to borrow. You are borrowing from yourself, from premiums you paid in and can pay back or not. The cash you borrowed will be deducted from the face value of the policy if you do not choose to pay it back.
Once you have decided which of your needs to plan for, begin talking to insurance companies to assess the different policies they offer. Compare the premiums charged for term versus whole life. Do they combine life insurance with other insurance policies and do they have written information on their policies.
Go online and get some quotes so you can compare the different insurance company policies. Be sure to investigate the insurance company also. You will want to know how long they have been in business, how many complaints they have against them, (check with the Better Business Bureau), are they licensed to offer insurance in your state, how do they handle premium payments and what are their health requirements for the insured. Be careful about allowing payments directly from your checking account. It is easy to find yourself overdrawn.
Contact one or more of the independent insurance agents locally and invite them for an informal insurance discussion. They will be thrilled to tell you all about the policies they have for sale. The agent may represent several of the major companies, such as the Prudential and Metropolitan.
If you are a member of an organization, such as AARP (American Association of Retired Persons), you will get regular offers in the mail for life insurance. Their recommended company is Hartford. Since you must be 55 years old or older to become a member, be assured that the cost is going to be higher for less coverage.
