Posted on: 7 December 2015
If you're in the market for life insurance, it can all seem so complex at first. However, if you do your research online and manage to weed out the good advice from the bad advice, you can make a lot of progress before even contacting an insurance company. This means that when you do speak to a representative you'll have a much better idea of what you're looking for, so you'll be easier to help. This can streamline the process of getting your insurance policy and prevent frustrating miscommunications. Here are three steps to take before contacting the company.
1. Decide if you want term or permanent life insurance
Term life insurance is often recommended for short-term needs, such as to make sure the mortgage on your house is taken care of if anything happens to you. Permanent life insurance is for the long-term; for example, you'd buy permanent life insurance if you know you'll want to leave money to your children, whether you die tomorrow or live for a hundred years. If both of these situations seem to apply to you, it's completely possible to buy both types of life insurance by having multiple policies.
2. Find out if you have any lifestyle aspects the company won't like
To go into this with your eyes open, you'll need to find both the normal going rate for life insurance and also the factors that can make that rate go up. The most common factors that make life insurance companies raise premiums include:
- Health conditions
- A history of reckless driving
- Hazardous work conditions
- Dangerous hobbies (like hang gliding)
If you have any of these situations in your life, you'll need to be prepared for a higher premium rate than the company advertises. Different companies have different standards, though, so find out as much as you can about each company you're considering.
3. Decide how much you need
Life insurance can serve many purposes. Because one main purpose is to protect your family's income in the event of your untimely demise, a frequently offered piece of advice is to acquire life insurance that's ten times the amount of your income. However, this doesn't take into account other expenses that you may want your life insurance to take care of, such as:
- Paying off a mortgage
- Paying off credit card debt
- Leaving money to friends or loved ones who aren't dependents
- Leaving money to charities
- Covering burial expenses
- Defraying estate taxes
As you can see, there are many considerations to think of when calculating how much insurance you'll need. Think carefully about how much you might need for each of these purposes before you decide on a life insurance policy.
Use these three steps to help ground your thinking in a basis of fact and to help you coherently express your thoughts and needs to the life insurance company (such as Advantage Insurance Agency, Inc) you choose.Share