Meta-Description: Applying for life insurance policies isn’t easy as pie, but with these five helpful tips, you can choose from insurance types that suit you.
Purchasing life insurance is one of the essential investments you will make in your lifetime. Your insurance protects you, the beneficiaries you’ll leave behind when you pass, and the investments and assets you have.
However, some risks may entail getting life insurance plans when you don’t plan or research beforehand. To avoid any regrets and mishaps in the future, consider these five tips on getting life insurance policies.
Asses which Insurance Type You Want to Get
Various life insurance policies cover different purposes. Take a look at them and choose which system is suitable for your needs. For example, some policies cover only a specific period, your entire lifetime, or for as long as you live.
Understanding how each of the policies works for your needs will help you choose wisely which insurance type is best to cover your needs. You can also compare the prices of the various insurance types offered by multiple companies to consider which one has the right coverage for you.
Decide How Much You Will Cover
After gauging which insurance policy you’ll get, it is time to decide how much you need from your insurance type. One way is to employ the DIME method when determining the costs you might leave behind.
DIME stands for:
- Debt – can be student loans, mortgage, or money you owe in your credit card
- Income Replacement – includes you or your spouses’ and kids’ life expectancy, and anyone who depends on your income
- Mortality – comprises funeral expenses and any end-of-life expenditures
- Education – covers expenses for your kids’ tuition fees from daycare to college
Pencil out all of your expenses that fall under the four categories. After getting the sum of all your costs, calculate how much you can subtract (your life savings, the coverage of your life insurance plan, or funds from your retirement plan) from the total so you won’t be overwhelmed by the amount you need to shell out.
Make the Most of the “Free Look” Period
Most insurance policies offer a ‘free look’ period–which can span around 10 days or longer–where you can review your life insurance policy and consult your insurance agent or company representatives about the terms and conditions that come with the policy.
During this time, you can cancel your chosen plan without any penalty. Your free look period gives you time to evaluate if term life, permanent, or single premium plan works better for you.
Use your free-look period to check if your home insurance will cover all mortgages and potential repairs for your home, especially if you recently purchased a remodeled foreclosed home.
Consider Possible Changes in Your Needs
Another reason you want to take advantage of your free-look period is you’ll evaluate any possible changes you want to make with your insurance policy. You’ll never know what might happen in your life that will need protection from your insurance. Consider a flexible policy that you can change depending on your budget and on the needs of your beneficiaries.
Consult a Trustworthy Insurance Company
Perhaps the most crucial step in getting any insurance policy is to consult and purchase from a trustworthy insurance company. Because getting life insurance means protecting the interests and needs of you and your family, getting your insurance from a reputable insurance company means protecting your investment and plans. You don’t want to be tricked or scammed by sketchy insurance agents.
Overall, getting life insurance policies means evaluating which insurance system works best for you, your financial plans, and your needs. Consult a trusted insurance agent to see which policies are flexible and suitable for you so you will protect your investments and your interests.