When it comes to insurance, there are certain things like auto and home protection that one simply can’t live without, but when it comes to life insurance, how proactive are you in protecting yourself against morality? One in two Americans are reported to not even ask their insurer about their life insurance policy. So when it comes time to get some answers, here are some questions to start with:
How much coverage do I need?
It all depends on what your end goals are. If you have a benefits plan at work, you have to coordinate that with what your insurance needs are. You can assess what your needs are now, or you can look at what you would need five to 10 years from today. At a minimum, it could be ensuring you are leaving no debt behind and leaving income for loved ones.
Should I buy term or whole life insurance?
Term insurance is basically cheaper since you buy it in blocks of 10, 20 or 30 years, etc. Permanent insurance is known as whole life insurance because that’s exactly what it covers, and you can cash out the built-up value that you’ve put in. However, permanent insurance is more expensive.
If I’m buying term insurance, can I convert it to permanent?
Convertible term life insurance offers a provision where (up to a certain age), you can switch your term policy to a permanent policy without a medical exam.
How do I know what term is appropriate for me?
A 10 year policy is expensive, and it will have to come up for renewal when you’re older and perhaps less healthy. A 20 term policy is typically where individuals begin, but again; it all depends on your personal goals.
Remember, when you’re working with an insurance provider, it’s important to work with someone who is going to guide you through the entire process and help you see how a policy will fit into your overall plan.