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Top Ten Tips for Buying Life Insurance
by Beth Clothier
The following are some valuable tips for buying life insurance:
1. Know what you need.
Prepare beforehand to have a better idea of the coverage that you and your family will require. By knowing what you need, you could save your family a lot of money and trouble down the road.
2. Know what you want.
Do you want term life, or whole life? To add any benefits in case of accidental death or dismemberment? To cover any possible long-term care? Knowing the type of policy you want can help greatly as well. If you only need to cover certain things for a specific period of time, term life is best, but if you want to have coverage your full life, as well as some savings built up, consider whole life. This way you will know how to budget your money and what you can afford.
3. Shop around.
Don’t buy the first policy from the first agent you talk to. There may be a company elsewhere that can provide you with better benefits at a better cost. Insurance is a competitive market, so there is a great variation as far as rates go. Many insurance brokers usually offer a comparison of rates from several life insurance carriers.
4. Know who you’re buying from.
Always check to make sure the company you’re considering or buying from has a good reputation. Check to see if there have been any customer complaints filed, and what the complaints refer to. It is a good idea to check the state of their finances as well, just to safeguard yourself against loss.
5. Understand your policy.
Never buy anything you don’t understand. Have your agent go over every aspect of the policy with you, and don’t hesitate to ask questions. It is better to ask questions and make sure the policy is best for you than to pay premiums on something that isn’t worth the paper it’s printed on, so to speak.
6. Know if you are able to change your policy.
There may come a time when you wish to convert your policy from term life to whole life, or any other number of changes. Know that these options are available should the need arise.
7. Understand any changes.
If your agent wants you to change your policy, make sure you understand why. Will these changes actually benefit you, or will they benefit the insurance company? Will you suffer any losses in the process of changing your policy? Make sure you understand and do what is best for you. Always wait until your new policy is paid for and in effect before you cancel your old policy as well, as there may be a gap between coverage.
8. Update your policies as needed.
When you first purchase insurance, you may be young and without a family or a mortgage. As you get older and gain these assets, you will likely need more coverage to protect them. Other things can change your needs as well, such as debts incurred. Always update your coverage to make sure there is as much protection available as possible.
9. Don’t buy something you don’t need.
Agents may try to talk you into coverage you don’t actually need, such as child life insurance. Because you are striving to replace your income in the event of death, and children usually have no substantial income to speak of, these policies are not worth your money. Save it for their education instead.
10. Make sure you can afford the premiums.
If you become unable to pay for your insurance down the road, you could lose your coverage and any money that you have put into it. You do not want to forfeit any benefits or savings, so make sure that the premiums are affordable enough in case of temporary loss or change in income.
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