If it’s your first time buying life insurance, it can quickly become overwhelming. There are many options available at different prices. It can be challenging to determine which policy is best for your needs.
When looking at life insurance, not only are you considering your current life situation, but you also have to think long term. What you pick now could affect you 20 years down the road.
Understanding life insurance doesn’t have to be a daunting task. With a bit of help for first-time buyers, you’ll be able to start comparing life insurance quotes to find the best one for you.
Know Why You’re Getting It
It would be best if you had a reason as to why you’re getting life insurance. Chances are you’re not buying for the sake of purchasing life insurance. There is a reason for why you’re starting to look at policies. Whether you’re by yourself or have a family, discuss with them why you’re getting life insurance and who would benefit from it.
Know the Difference Between Whole and Term Insurance
It’s crucial that you know the difference between whole and term life insurance. Both will have the death benefit – the amount of money that goes to the person you designate – and the beneficiary – the person who would receive the death benefit. They are both there to help out those you love if you died prematurely.
Term life insurance is one of the most popular ones, and the easiest to understand. Term insurance is how the name suggests – you buy a policy for set amount of time or a term. It typically is 10, 20, or 30 years of coverage. It protects you only during the agreed upon time. Once the term is up, you then either renew your coverage or let it expire. Term insurance tends to be the least expensive option.
Whole life insurance, on the other hand, is for life. From the moment you buy coverage to when you pass, you will always be covered. Your monthly premiums remain the same throughout the whole coverage. What makes whole stand out for some is that it has a cash value to it. It’s tax-deferred money that comes from part of your monthly premiums. Because of all this, the premiums are more expensive.
Shop Around
Don’t think that you have to buy the first policy that is sold to you. Since there are many options out there, you’re best to shop around for different policies and different insurance companies.
Don’t Get Talked Into Something You Don’t Want
As a first-time life insurance buyer, you may be vulnerable to being talked into something that is more than what you need. That is why it’s essential to be prepared when you speak with someone. If you’re unsure about what they are offering, it’s okay to say no.
Ask for Help
When you start gathering policies but you’re still unsure, it’s a good idea to get help from someone who’s going through this already, or from a professional.
Remember, you want the best insurance policy for your current situation. You wouldn’t want to leave your family stranded because the policy doesn’t cover everything you thought it would.
