iQuanti: When first considering life insurance coverage, it's vital to prioritize the right information so that you can make the proper choice for you and your loved ones.
Still, policies can carry a number of details that make choosing between them difficult. If you ask the right questions during your life insurance search, you'll start to understand what policy will work the best for you. Here are five essential questions you can ask before buying a life insurance policy:
What are my life insurance needs?
Consider your main goals when purchasing life insurance. Do I want to leave an inheritance for my loved ones when I pass away? Do I want to make sure my family is provided for if my spouse passes on? Do I want to build a savings account that can ensure my loved ones' financial security?
Answers to these questions will affect what type of policy you purchase, as well as what benefits and term lengths you will choose, so take some time during the process to understand your needs and how life insurance will help you meet them.
What type of life insurance should I buy?
When looking for life insurance plans, you should figure out which type of life insurance would work best for your needs. Here are two common types of life insurance policies:
Term life insurance
Term life insurance only lasts through a specific period of time, usually between 15 and 30 years, but can offer more affordable premiums as a whole. For many conventional life insurance customers, term life policies may be the right choice.
Permanent life insurance
Permanent life insurance lasts throughout the policy carrier's life and can also accrue cash value, similar to a savings account.
There are a number of situations where permanent life policies also carry practical use, such as for parents who will need to leave an inheritance for relatives or children with disabilities. These beneficiaries need financial support no matter the age of the policyholder.
Permanent life insurance provides an effective and secure solution for these contexts, and it also benefits these policyholders by growing in cash value.
How long will I need life insurance for?
This question can affect what your term length is or whether you will need permanent life insurance, so it's an important one to answer before purchasing coverage. It can also affect the price of your premiums if you're purchasing a term life insurance policy.
Purchasing life insurance for a longer period will be cheaper the younger you are, so it might be financially smarter when you're young to opt for a longer period of coverage, if need be.
What can my budget afford?
Once again, term life insurance costs significantly less than a permanent life plan, so life insurance customers looking to keep costs down may want to opt for a term life plan. But if you want coverage that will last for your lifetime and can afford to pay higher premiums, permanent life insurance may be the right choice for you.
Your budget may also affect how large the payout sum for your plan will be, so consider your other financial goals when purchasing a plan.
What is the application process?
Some life insurance providers will require a basic medical examination as part of your application process, while some might require a more extensive examination if you have a preexisting medical condition.
Make sure you know the ins and outs of the application process for your coverage and whether you will have a hard time meeting those standards. If you can't, you may want to consider a different policy.
The bottom line
Don't let the fine print in your life insurance policy confuse you! Understanding what you need your life insurance plan to accomplish is the first step in finding a plan that works with your budget and long-term goals. Once you can answer these preliminary questions, you will be that much closer to picking a life insurance policy that's a great fit for you and your loved ones.