Anyone can tell you about the benefits of getting life insurance but the main benefit is that life insurance provides financial security to your family at a time of loss. If you are the main provider of your family, getting covered by life insurance helps prevent the risk of financial trouble in the event of an unexpected death.
However, finding the right type of life insurance is nothing like shopping for clothes or booking a flight to the Bahamas. Remember, you want your money to benefit your family in the future, so it’s important to find an insurance policy that’s right for you.
Here’s a guide to help you find the right product.
1. Assess your current situation
The first thing you need to do is to determine how much coverage you should be getting. Start by calculating your annual salary and consider whether you are working at a high-risk job. You can also include bills and other household expenses that should be covered at death like paying off a mortgage. Insurance companies have their own ways of estimating the total death benefit based on your financial situation and other factors.
As a heads up, you might want to come up with estimates before you start shopping for the right policy. Some companies offer to calculate your estimated coverage amount for you. If you’re opting for Allstate Life Insurance, for instance, you can use their financial calculator to identify a policy that’s customized for you.
2. Get quotes from different insurers
Just like everything else, shopping for life insurance is a process that involves a great deal of vetting. Don’t settle with the first insurer you encounter; look for others in the market who might offer better deals.
Start by creating a shortlist of possible insurers. From there, you can request quotes from each one so you can start comparing rates, coverage features, and product types. For example, do they offer whole life insurance? You will encounter terms such as “Fixed Period Option” or “Non-forfeiture”, so be sure to do your research before you pick the right insurer.
An effective way of comparing multiple quotes quickly and easily is by using a registered life insurance broker, such as Reassured.
3. Ask the right questions
Getting quotes is one thing, but making sense of the numbers and specific policy features will be easier if you meet with an insurance agent and clarify the terms stated on the policy. This is important as you need to make sure you are getting the features indicated on the policy. Other than that, you also need to know if the policy requires you to pay surcharges and fees on top of your premium.
You might want to ask if the policy has benefit exceptions, which is usually the case for insurers offering very affordable terms. If you are planning to move to another country, you can ask the insurer if doing so will affect your benefits. There’s a lot more you can ask an insurance agent, so be very meticulous as you want every dollar to count.
Buying the right life insurance policy isn’t rocket science, but neither is it a walk in the park. You just need to know how you can find great deals that pay out nicely in the end.