Purchasing life insurance should be a priority, as it guarantees financial support for your family members and loved ones when you are no longer around. However, selecting a policy and provider that best suits you and your lifestyle, as well as the expenses you would like to cover upon your death, can be a complicated process.
Before applying for life insurance, of course, you can do your research and consult online resources, such as The Insurance Bulletin, but there are some questions you will need answered to find out which coverage is right for you.
Why do i need life insurance?
The life insurance coverage, as a basis, will pay a sum of money to your nominated person (s), known as beneficiaries, upon your death. With just a monthly or annual premium, you can be assured that they have support in the event of death.
But when considering your life insurance policy, you should also think about the specifics of this payment. Beforehand, you need to decide who will be the beneficiaries and whether they will need a lump sum or a steady stream of payments. Taking the time to work through these details will help you choose the right coverage for you.
How Much Life Insurance Do I Need?
To answer this question, you need to take into account the amount needed to ensure the safety of your beneficiaries, but also the amount of premium you can afford on a monthly or annual basis. You also don’t want to have life coverage for less than what your loved ones will need.
This will require some calculation, and there are several ways to solve this problem:
- You can figure out how much you can afford to pay each month, rather than the policy total, and calculate how much coverage will buy you.
- You can list the financial obligations you would like to pay and calculate the total of those expenses that need to be covered.
- You can calculate the payment amount by multiplying your income by the number of years you think your family will need support.
- The most complicated but most complete calculation is to combine the above items and calculate your debt, the income you want to replicate, and mortgage and education expenses.
How long should the blanket last?
The duration of the life insurance depends only on the needs of the individual and should take into consideration the children and whether you need them to be financially supported until adulthood.
It will also affect the type of insurance you request. For example, term life insurance will cover you for a predetermined period, while whole life coverage will last as long as you live.
What details do I need to provide?
In order to purchase a life insurance policy, you will need to provide certain details, including your occupation, whether or not you smoke, or any risky activity that is part of your lifestyle. However, depending on your provider, this may include a full medical examination by a doctor or just a series of questions to be answered. In any case, it is advisable to be completely truthful, as this will affect the rate and level of coverage.
Can I modify or add extras to the policy?
Life is unpredictable, so you should look for a life insurance policy that can reflect that. Before committing to a provider, check if you can adjust your policy easily and at no additional cost.
Interesting related article: “What is life insurance?” Principles of life insurance “