You might not think about your life insurance needs until an untimely death or tragic accident strikes. That’s why it’s important to educate yourself now about the best ways to secure your future and the lives of your loved ones. Buying a life insurance policy isn’t an easy decision, but it can be one of the smartest moves you make as a prudent adult.
A life insurance policy ensures that if something unfortunate happens to you, your family will have the financial resources they need to get through their hardest days. While everyone has different circumstances and needs, there are a few general things you should know before buying a policy.
Purchasing the right type of policy at the right price is essential to protecting yourself and those who depend on you most while also avoiding unnecessary costs. Here are some tips on how to shop for a life insurance policy in order to make sure that you get exactly what you need and nothing that you don’t.
Research your options
First, you need to research your options. You’ll want to be familiar with the benefits, costs, and types of policies that are out there so that you can make an informed decision about what you purchase. If you have certain needs that you want to be fulfilled by your policy, such as the need to cover a child’s education, you’ll want to make sure that the policy you select is adequate for that need.
If you just walk into a life insurance company and request the first policy you see, you’re more than likely going to get the wrong policy that doesn’t cover what you need. And if you take the time to do your research, you’ll be much more likely to walk away with a policy that suits your needs perfectly.
Know what you need and why
You also need to know what you and your family need in a policy. For example, do you need a policy that will cover your spouse or a policy that will cover your children’s education? Is a term or whole-life policy going to be best? You also need to understand why your family needs the policy. Do they need it so they can keep their home? Do they need it to pay off a student loan?
Understanding the why behind the policy will help you make a more informed decision about what type of policy you should purchase.
Take the price of a policy seriously
You also need to take the price of a policy seriously. Don’t just walk into a life insurance company and ask for a policy without having any idea what the price is going to be. Be prepared to give them some basic information about yourself so that they can give you a rough estimate for the price of the policy.
While you should definitely shop around and see if there are any better deals out there, make sure that you at least have some sort of idea of what the price of the policy may be.
Don’t stop with a quote
It’s tempting to stop with a quote after you’ve got a rough estimate of the price of a policy. Don’t do that. You’ll want to go to a few different insurance companies and see what types of policies they have to offer. You may be able to find the same policy at a much lower price at one company than you will at another. You may also find that one company that offers a better type of policy than another. And you should always shop around before buying a policy so that you can get the best policy for the lowest price.
Ask about riders and extensions
If you find a policy that you like but it doesn’t seem to cover 100% of what you need, ask about riders and extensions. Riders and extensions are additions that you can make to your policy that will allow it to cover more. For example, you can add an inflation rider to any term policy to help make sure that it grows with you as you grow older and your costs increase.
You can also add an extension to a whole-life policy to increase the amount of coverage that it provides. If a policy doesn’t seem to cover everything you need it to, don’t just walk away. Ask about riders and extensions that may be able to help you do the policy work for you.
Be wary of exclusions
Finally, be wary of exclusions. You’ll want to make sure that any policy you purchase is as comprehensive as possible. You don’t want your policy to have any exclusions or omissions. When a policy has an exclusion, it means that it doesn’t fully cover something that it should.
For example, some term policies will have an exclusion for any education expenses that you may want to cover. Be sure to avoid any policies with exclusions and choose a policy that will cover everything that you need it to cover.
In short, when you shop for a life insurance policy, you want to make sure that you shop around, know what you need and why, take the price of a policy seriously, and be wary of exclusions. A good life insurance policy will protect you and your family in the event of unfortunate circumstances while also being affordable. It’s important to educate yourself now so that you’re prepared for the future.