There are many types of life insurance plans on the market, and the choices are likely too many for you to choose from. More significantly, you might encounter some of them that seem unfamiliar to you. Remember that while the specifics of each life insurance product or policy may vary, the fundamental goal of life insurance remains the same. Life insurance is there to help you leave behind a certain amount of money in the event of your passing.
Here are 6 Factors to think about when looking for a life insurance policy:
Your age is one of the key factors in deciding which life insurance product you select—and even what options are available to you. You’ll generally have more options to choose from the younger you are. Furthermore, your ability to obtain some types of life insurance, such as basic term life insurance, expires at age 60.
Women typically live seven years longer than men do. This results in cheaper coverage for them. The difference in life expectancy, though, is beginning to narrow. The price of your life insurance premium will be largely the result of considering your age and gender.
Almost all life insurance policies require a medical history questionnaire or a physical examination to determine your health. It almost goes without saying that your insurance policy will be less expensive the healthier you are as a person.
Smoking has a significant impact on life insurance premiums.
In general, term life insurance is less expensive than permanent life insurance. This is because in term insurance, the policy is only in force for a predetermined amount of time, and there is no financial value inside the policy.
With a term insurance policy, you decide how long your life is covered (often 10, 20, or 30 years). When that period expires, they calculate a new rate. That rate will often greatly increase if you wish to keep that specific coverage. This is usually because of the condition of your health. With permanent insurance coverage, the insurance is in force for the rest of your life and the premium stays the same.
Consider term life insurance if your budget is your first concern. Term life insurance, sometimes known as “beginning life insurance,” enables you to purchase a plan that is practical and within your price range. Term life insurance is a place to start. However, if you are looking at a needs analysis with an agent, it might suggest that you should have additional coverage.
Do you want a policy that only offers you protection for a limited time? For instance, you might want to get life insurance if you recently bought a house with a 30-year mortgage. A 30-year term insurance coverage might be a good option for you. This is especially true if making sure your mortgage balance is paid off after passing is one of your top priorities.
A permanent life insurance policy is more appropriate for your needs if your main worry is having protection in place even 45 years from now.
Some insurance policies produce monetary value for use in other ways. For instance, certain permanent life insurance alternatives provide a policy to accrue cash value. This is similar to a savings account that may be accessible as the need arises.
A life insurance agent can help you evaluate your situation and needs and suggest whether term insurance, permanent insurance, or a combination of both is ideal for you if any or all of these factors seem daunting. Just remember, it’s better to have some life insurance than none at all!