Helpful Tips for Buying Life Insurance

2007-03-08 10:33:40

( Insurance )



Many Americans are still uninsured because they have the misconception that it costs a lot. The truth is that while it is costly, buying life insurance is necessary, especially if you have a home and family to support.

Buying life insurance is just like shopping. You need to scout for the best life insurance quotes. Life insurance quotes depend upon several factors such as your age, health condition, lifestyle, occupation, payment period and if you want additional features or riders. Younger age, good health and less risky occupations and lifestyles translate into lower premiums.

Look for a strong reputable company to insure you, and get several insurance quotes and offers. Study them and discuss carefully with your family before making a decision.

You also need to decide on the amount to be insured and the length of the insured period. While it is ideal to insure at an amount which will be enough to cover all the expenses of your household, this might result in a premium which may be way beyond your budget. Instead, base the amount on your total outstanding liabilities or debts. This way, you will at least alleviate your family of any future debt burdens in case you "move on".

You should also decide whether to pay annually, semi-annually, quarterly or monthly. You can even arrange with the insurance company for automatic debit to your account each time the premium is due so that you don't forget about it.

You can also choose the type of life insurance. Buying a whole life type of insurance means paying the same amount and get coverage for the rest of your life. If you choose variable life, you pay a slightly higher premium but only up to a specific time period, and still be covered for the rest of your life. In term life, you pay a very low amount and be covered for a limited period only. A universal life type of insurance gives you flexibility in the sense that the length of your coverage will depend on how much premium you pay. There are pros and cons for each type of insurance, which you should discuss with your agent.

Finally, you can add extras or "riders" to your insurance package. You can add an extra insured person as co-insured. You can also add a provision to change some parts or terms of your insurance contract in case you are unable to make premium payments. You can add hospitalization or disability coverage too. Of course, your premium will be adjusted to accommodate these riders.

Buying life insurance is a big responsibility. Your policy could lapse if you miss payments. Always keep your insurance file up to date especially regarding any changes in employment and health condition. Above all, work closely with your agent especially in case you need to make changes to your policy.


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