Everybody is well aware of the importance of having life insurance. If you are planning to buy one for the first time, you must be confused about what kind of life insurance policy is best for you, how much coverage do you need, and from which company should you buy the policy. Life insurance is meant for financial support of your dependent family members such as kids, wife, or parents after your death. Listed below are some important tips that can help you buy the right life insurance for yourself.
1. Understand the Purpose of life Insurance:
Although most people have to buy a life insurance policy at a certain point in life but don’t buy it just because everyone around you has bought one. Life insurance is basically financial security for the family of the holder after his or her death. Life insurance protection can help to pay essential expenses like mortgage, college tuition fee of your kids, or other living expenses of your family. Therefore, if you have a family that depends on your income for support, you should buy a life insurance policy. Moreover, if you do not have such needs presently but anticipate that you might have them in future, you can consider purchasing a small ‘starter’ policy because the younger you are, the cheaper will be the life insurance for you.
2. Determine the Required Amount of Coverage:
The amount of money your family or beneficiary will receive is called a death benefit. The easiest way to estimate the amount of coverage you’ll need is to multiply your annual salary by 8. However, the best way to decide the amount of coverage that’s right for you is to discuss with a life insurance agent. He can give the right advice depending on your current expenses and will educate you about the workings of the life insurance policy. There are also online calculators to figure out the amount of coverage you’ll need for your policy. Another formula to calculate the required coverage is multiply your annual income by the number of years left for your retirement.
3. Look for the Right Type of Policy:
After figuring out the amount of coverage you’ll need, the next step is to decide on the right type of insurance policy to meet your needs. The two main types of life insurances are term life or permanent life insurance. The term life insurance policy offers a more affordable premium while permanent life policy gives you more comprehensive coverage. Permanent or whole life insurance provides coverage till the day you die, and your beneficiary will receive your death benefit, while the term life only covers you for a specified time period. iSelect enables you to compare a range of life insurance policies with only a few clicks and saves your time and effort for selecting the right one for yourself.
4. Choose a Reputable Insurance Company:
It’s essential to select a reputable insurance provider that outlives you. Check the financial stability and customer service ratings of the insurance company. Take advantage of the iSelect and compare the insurers by their ratings, online reviews, and insurance features they provide. Remember that a life insurance policy is as good as the company you buy it from. Insurance companies are rated on the basis of their financial standing, quality of investments, and other related details. With your due diligence, you can make sure that you are not paying too much for your insurance policy.
