Whether to get a life insurance or not is a tough decision to begin with, but if you want to choose the right policy it might give you an even bigger headache. Once you decide you want the kind of security that comes along with life insurance, you’ve just made the first step. Every insurance company has their set of policies besides the regular ones and so many riders that will make your head spin, especially once they start bombing you with legal terms and different rates. Many insurance agents won’t prove helpful at all, especially if they’re getting paid on commission. We’re not saying that most agents will try to rip you off or scam you, but be aware that they’re most likely offer you something you don’t need, just to get you to get a more expensive life insurance plan.
One of the first things to take into account is the amount of protection you need. Two main factors are the number of debts and the number of persons that are financially dependent on you. You get the logic – the more debts and dependents there are, more insurance you need. They say that the general rule of thumb is to multiply your yearly salary by 5 to 7, but that’s just a rough estimate. No one knows your needs better than you, so take some time to think it through.
The next big question is whether to go for term life or whole life insurance. While term might sound like a good idea for younger people who can’t assume their future needs, if you already have a stable job and a family and can predict your future expenses like your kids’ education, it would be a better plan to go with whole life insurance. If you’re a senior, you have to know that many insurance companies refuse to give you term life insurance if you’re over a certain age, or you might end up paying sky high premiums that don’t pay off. Some advocate going for whole life insurance because of the investment component it includes, but you shouldn’t think of your insurance as of an investment. Things might change greatly over the years and you can’t rely on your life insurance money.
Why not benefit from internet and save money? It takes some extra time to check out online offers, but it might save you up to a couple hundred dollars. There are even some websites that offer to do the comparison for you, and that’s definitely worth checking out. Another helpful tool is software that calculates the estimated level of coverage you need based on a set of questions about your financial situation. These life insurance calculators can really come in handy when trying to make a rough estimate. While most people are just too lazy or busy to go browse different offers and just go for the first that sounds okay, do yourself a big favor and shop around. You’ll be surprised to learn that there are big differences in rates and health requirements, and it pays off to do some research first.