The option of adding a life insurance policy to your portfolio is a wise one, especially for many older Americans who do not wish to leave behind a burden, and who would like to have something to pass along to their family.
But when it comes time to find the company and policy that's right for you, well, that's where things can get tricky. For first timers, looking to the Internet can be outright confusing. With so many referral companies out there and varying rates, quote suggestion tools and more, it's never really black and white from the get-go. Use these helpful life insurance shopping tips to more easily cut through the red tape and find the plan that's right for you.
Determine Why You Need It
An article by How Stuff Works advises that you determine why you need life insurance before you start shopping. What is the main purpose for you needing life insurance?
Knowing this will help you more easily choose a plan.
Are you just looking to cover your final expense? Do you have debt that would need to be paid off in the event of your death? Perhaps you want to know that your family will be financially taken care of long after your passing?
After you determine why you need it, you can then start shopping for a plan that's right for you.
Decide Your Coverage Level
According to the Insurance Information Institute, there are two different main coverage types which each offer varying benefits.
Term insurance has a set period of time that it runs, typically 20-years. It's ideal as a lower cost for of insurance, but also has lower coverage and less payout. It won't usually build equity like permanent insurance could, either, but can offer the coverage that you need. Once it lapses, it needs to be renewed.
Permanent insurance never goes away, but also comes at a higher premium. It will pay out the same benefits whether you die today or live to be 110. The money that you pay into it builds in equity, and you can even borrow this money (in some cases), regardless your credit history. Some older Americans use this to help them save money for retirement, so they can cash it out at a later time as a tax-free source of funds.
Choosing A Provider
When choosing a provider, the Insurance Information Institute advises that you consider these following elements: the product, identity, financial solidarity, market ethics, advice and service, claims and premium and cost.
Chances are good that an auto or home insurance provider you are using already offers life insurance, and it could be available at a group rate if you already hold one or more policies. Talk to your agent to seek expert advice. Take your time when comparing plans and policies, and be sure to gain counsel from an experienced financial advisor before making your decision.