Life insurance is a tough topic for people to talk about because it forces them to think about the possibility of no longer being here. However, the discomfort of the topic is exactly why it’s important to have the most common life insurance questions answered. Life insurance provides families with a benefit in the event something happens to the main breadwinner. Having the uncomfortable discussion is a key part of long-term financial planning.
These days you can find insurance online, but they may not be able to give you an exact price. FindMyInsurance.co and PolicyGenius.com are two websites that can give you a ballpark estimate of what your life insurance policy would cost. After applying and having a medical exam, you’ll be able to get the actual cost of your life insurance. If you’re too busy — here’s our guide to figure out how much life insurance costs
Why You Need Life Insurance
You might think it’s enough to have savings, assets, or government benefits that you can pass on to your loved ones. But, if there are any other claims on your assets, for example from companies you owe money to, they may get a priority claim on your estate. Not only that, it can take years to sort out an estate and figure out who should get what. By having a life insurance policy, you can have extra assurance your family’s needs will be taken care of.
You also want to be sure your family can comfortably handle your final expenses. It can be burdensome for them to figure out your final arrangement in the middle of grieving their loss. Having life insurance can cover any medical and funeral expenses as well as provide long-term stability for your family.
When to Buy Life Insurance?
Here’s another life insurance question. When to buy. You may think of life insurance as something you only have to think about later in life. However, when it comes to whole life insurance, it’s best to purchase when you’re young and in good health. Insurance rates are typically lower for younger people than for those who are older or who have medical problems. Not only that, when you purchase whole life insurance earlier, there’s more time for your money to grow.
Regardless of the age you’re purchasing life insurance, it’s important not to lie about your medical condition. Your life insurance agent will check your medical records before paying claims to be sure there were no pre-existing conditions.
Renew Your Life Insurance Policy Each Year
Don’t assume your life insurance policy will automatically renew each year. You may have to protectively review you’re policy to keep it from lapsing. And, if it does lapse, you’ll have to start all over again. Depending on changes in your age and medical history, your insurance premium may increase. Finally, you could lose any value you had in your old policy. Remember that your premium could increase so keep this in mind as you’re choosing a policy and planning your budget.
Don’t Let Insurance Agents Oversell You
Insurance agents are typically paid a commission on the products and “extras” they sell. Keep this in mind as you’re speaking with an agent about your insurance needs. Work to understand the products and to avoid being sold something you don’t need. It can help to talk to more than one insurance agent as you can have more information for making a final decision.
The purpose of life insurance is to be sure your spouse and children are taken care of in the event something happens to you. Shop around for the best policy and coverage that fits within your budget.