Great tips on choosing the right life insurance
Whether it’s your first time in getting a life insurance or you’re renewing your insurance policy, this can be a real pain in the butt. Most companies make it complicated to understand the different types of policies by sticking to the legal terms most people aren’t familiar with, and will often try to talk you into taking policies you don’t need just to make more money. We’ll try to provide you with some useful tips on which things to take into account when getting life insurance and how to make a good decision.
First of all, no one knows your financial situation better than yourself, so make sure you work that in your favor and calculate the amount of protection you need. One of the best ways to calculate the right number is by taking your yearly income and multiplying it by between 5 and 10, depending on your debts and the number of people dependent on you financially, picking the higher amount if you have a larger number of debts and dependents Getting overprotected or under protected is the most common mistake when it comes to life insurance, so make an estimate before you go see an agent.
Learning the basic terms is a must when it comes to life insurance. We’re not saying that you need to become an expert, but knowing the difference between term and permanent insurance is something that will make your decision a lot easier. Most insurance company agents will try to talk you into getting permanent insurance with a lot of ‘what if’ scenarios that are unlikely to happen, so don’t let yourself get affected by it. There is a lot of term insurance policies that perfectly meet your needs and are way less expensive.
If you want to find the best deals, try contacting an independent broker. While company based brokers will do their best to talk you into some of their company’s policies, independent brokers can offer way better deals because they have access to more options with different insurance plans and price ranges.
Make sure your broker has spent enough time analyzing your situation. If they make a suggestion during the first meeting, you should say thanks and look for someone who will actually look into your financial matters. It takes way more than just one meeting to carefully look into the option that meets your needs best.
Check to see if your broker is getting paid on a commission base. If this is the case, you should be more careful because they could have a conflict of interests and suggest you the deal that might not be the best option for you but brings them more commission money. Not all commission based brokers are necessarily a bad choice, but make sure they are doing their best to work in your favor.
While you’ll be advised to get whole life or universal life insurance because it has a savings component, it’s a smarter idea to just focus on getting protected and not trying to make an investment out of it.
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