Life insurance is an important policy that works to protect your family from financial hardship when you’re no longer able to do so. Picking the right policy is crucial, as not all life insurance policies are created the same. Before you settle on life insurance, it is important to ask your insurance agent the right questions.
1. What Type of Life Insurance Policy Do I Need?
There are three different types of life insurance all geared for separate purposes. These are whole life insurance, term life insurance and universal life insurance. A whole life insurance policy will cover the policyholder as long as they live and payout to the beneficiaries once the policyholder passes away. A term life insurance policy, on the other hand, lasts for a set number of years, or term. If the policyholder passes away within this term limit, benefits will be paid to their beneficiaries. Universal life insurance policies are a type of whole life insurance policy that allows the policyholder to withdraw cash value while the policy is active.
Everyone’s life insurance needs are different. You may want a policy your entire life or only until you’ve paid off a certain debt.
2. Who Can I Add as a Beneficiary?
Beneficiaries are the individuals you can add to your life insurance policy to receive compensation when you die. There may be certain limits to who you may add to your policy, however. In general, it is limited to loved ones and family members such as spouses, children, grandchildren, siblings, etc. Make sure you can add whoever you need to your life insurance policy.
3. How Much Will It Cost?
Of course, the cost of your life insurance matters, as well. You don’t want to end up paying too much for not enough coverage. Be sure to compare quotes or use an independent agency that can compare them for you.
4. How Much Life Insurance Do I Need?
Just like the type of life insurance varies per person and per family, so do the limits. In general, you will want enough life insurance to cover any debts or expenses you may leave behind that your loved ones could be responsible for. An insurance agent can help you calculate how much life insurance you need to protect your family.
If you have any other questions, don’t be afraid to ask an insurance agent.
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