When purchasing goods and services, consumers most often base their decisions on a number of factors. The facts, reviews from trusted sources, as well as feedbacks from first-hand customers are just some of the crucial elements affecting a person’s buying decisions. Before you start the process of shopping for one, you need to educate yourself about the importance of life insurance and how it can help you in achieving that goal of financial stability and security for your family.
Here are steps that you will definitely need along the process of buying a life insurance policy:
- Careful assessment your need for life insurance
Identify the specific needs of your family. Making the right choice will highly depend on your ability to enumerate all the needs your family currently have and those needs that you are most likely to encounter in the future. Is your reason in buying insurance simply for the reason that you want to your family to have enough to cover for death expenses such as funeral costs? Will you be leaving young children behind that will most likely need enough funding for education until college? Did you just obtain a mortgage? Or a brand new car? Answering these questions will definitely provide you with a clear idea as to how much insurance or coverage you need to obtain to get maximum protection in the future.
- Coverage should be ten times your annual income
This is one of the more standard rules when it comes to calculating how much insurance to get yourself. Of course, your top goal is to replace the income that your family may possibly incur if and when you pass on. Assume that it will take your family five to ten years to be effectively cope with your loss as bread winner. In this case, it is only right to get coverage that is ten times your annual income.
- Whole life insurance simply cannot guarantee you total protection
Before even thinking of purchasing whole life insurance, evaluate your financial capability to maintain such a permanent life insurance policy in place. A large percentage of whole life insurance policy holders are underinsured as they are less likely to modify the terms of their policy due to fear of great increase in premium rates. Some encounter dealing with insurance providers that make not-so-smart investment decisions, which make policy holders suffer greatly at the end of the day.
If you really want to go for a whole life insurance policy however, make sure that you still get enough coverage. The investment or cash value factor of whole life insurance should only be your second priority. If your budget cannot allow for such rise in premiums, it may be best to stick with affordable term life insurance contract instead. You can always renew or convert term life insurance policy if your financial status improves in the future.
- Never shop by impulse
Never purchase a life insurance policy from the first provider that offers you cheap rates. It always pays to look around and seek the advice of life insurance experts or those who have experience in successful life insurance shopping.