Life Highlights
By Joel Zimmerman

A Fundamental Guide to Buying the Right Life Insurance

Life insurance is a useful tool to defend yourself and your loved ones against the uncertainties of life. Unfortunately, not everyone realizes the importance of insurance and so, many people remain bereft of its benefits. If you are the sole breadwinner and your loved ones depend on your earnings, a life insurance policy can help you secure their future in case you die prematurely.

Moreover, life insurance enables you to protect business interests and safeguard your legacy. It allows policyholders to pay bills and cover costs like college fees. It also helps you plan for your retirement. Of course, it’s essential to invest in the right life insurance types and pick a coverage amount that actually works for you.

Here are some of the questions and points that you should consider before buying a life insurance policy:

  • Is life insurance right for you?

Life insurance gives you the benefit of financial security, especially if you’re the only earner in your family. However, if your spouse is also earning, or if your children live independent lives, you probably don’t need to buy extra insurance over any coverage that’s supplied by your employer.

  • How much insurance do you need?

A professional agent might tell you it’s best to take out sufficient insurance to cover 15 years of earnings. Go instead for a policy that covers fewer years of earning as well as your debts. Debt can place a huge financial burden on your dependents, so make sure your insurance plan replaces any outstanding debts.

  • Select between life insurance types

There are basically two types of insurance policies: term life insurance and whole life insurance. A term insurance plan is cheaper, so stick with that unless you need to pay serious estate taxes. In that case, it’s better to take out a permanent life insurance.

  • Select the right timeframe

As parents of young children, you’ll obviously be concerned about school and college expenses. Your plan must be compatible with your children’s ages, as well as their current and future financial needs.

  • Do your research

It’s unwise to make a hasty decision and buy the first insurance plan you come across. Take your time, do your homework and analyze your financial situation before you select a policy. Browse online and consult different insurance agents to see which plan best fits your needs.

  • Keep your options open

Don’t limit yourself to captive agents who sell the products of a single company. Talk to “independents” who generally sell the insurance products of many different companies and can provide you with a wider array of quotes.

  • Double-check reliability

Do a background check before you place your trust in a third party. It’s important to verify the credentials of the insurance agent and of the company they represent. While not everyone is out to defraud you, it doesn’t hurt to take precautions and protect your earnings.

Life insurance is a very beneficial investment tool that can help ensure a comfortable lifestyle for you and your family in times of hardship. An insurance policy gives you reassurance that your dependents will be financially secure in the event of your premature death. Moreover, it covers necessary expenses like your children’s education costs and marriages.

The right insurance plan can provide generous tax benefits and also enable you to fulfil your financial goals, such as retirement planning, building your dream house, etc. The financial experts at LifeCentra can help you understand the tax benefits of life insurance, the gains you may expect as well as select the best policy that fits your needs and goals. Get in touch with us today!

Leave a Reply

Your email address will not be published. Required fields are marked *