Getting started with a life insurance plan can be a rewarding and confusing experience. Adding a life insurance plan to your financial planned future is important for any goals and for your family life.

Getting a life insurance policy is not for everyone, but the first step is to understand how much or little you need and what steps you need to take to proceed. Talking with a financial advisor is a good way to put your own finances in perspective, but you can consider the following questions when looking into getting a life insurance plan.

Do you need a life insurance policy?

Most people that get life insurance policies have families they want to protect and provide for them in case something happens. Most single people with no dependents do not need life insurance policies; though if you are in a particularly dangerous life of work it can be advisable.

You also need to know what your goals are for getting a life insurance policy and what you need to do around this policy. Taking care of your children, getting them through college while making sure the house is paid off are good reasons to consider a life insurance plan. The type of policy you get needs to ensure these priorities.

How much insurance do you need?

The amount of life insurance you need is dependent on your income and home many people are dependent upon it. It also considers the amount of debt you carry and how you live your life.

It takes a bit of math to be able to determine the amount of money you can set aside on a regular basis while meeting your other basic expenses and debts.

It’s beneficial to obtain a policy that is 5 to 10 times your current annual salary. This ensures your family and everything you and they hope for is secured in the event of your early death.

It also makes sure they are not responsible for any debts you might leave behind while maintaining their way of life during this time of adjustment.

What company gives you the Best Deal?

When you begin looking into policies, you need to start with the companies themselves. You can talk with representatives from different companies and determine what would be the best for each other them.

You can create a spreadsheet or a chart of all the benefits and payment time frames so you know all the pieces of your potential plan.

You should also look into the sustainability of the company and their own financial standing. While most businesses do not expect anything to happen to their business, it is better to know something about the company that will be handling your money.

What Policies are the best for your situation?

There are four different types of plans you can review with an agent including:

Whole Life: A whole life insurance policy covers your family with death benefits, savings, and cash accumulation. It provides complete coverage for your life. Some companies refer to this type of plan as traditional or permanent life insurance policy.

This type of policy requires you to pay more than the scheduled amount of money every month. Any dividends the account generates gets reinvested and it becomes a source of equity while you are alive. These dividends can buy more death benefits if you pass.

Term Life:  A term life insurance policy is guaranteed to pay benefits to your family for specific period of time. You have to renew this type of policy or covert it once the time period for payments has expired.

This type of policy offers only death benefits to your family without a savings component. This policy helps pay for any unpaid expenses you have upon your death such as a mortgage or credit card debt. It can also be used to pay your funeral expenses or be given to a charity of your choosing.

This type of policy has lower premiums and is less expensive to buy and maintain because of its restricted timeline. This plan is less of a risk to the insurance companies as there is less of a chance of them needing to pay in the event of your death. It is perfect for situations in which you need insurance for only a select period of time.

Variable Life: A variable life insurance policy is one that has several types of investments including bonds, stock, money market funds, and equity funds. This is a risky type of investment that has federal regulations monitoring the investments made on your behalf.

This policy has specific tax benefits worked into the policies for tax-deferred earnings or the ability to access the money through tax-free loans. The interest accrued on the loan is taxable if the policy is surrendered.

The benefits of this plant its flexibility. There is no fixed premium amount and you can adjust your payments as you need to your own needs. This is a great benefit as life events cause shifts in your income. Though, this flexibility can reduce the benefits confirmed on the plan.

Universal Life: Universal life plans are permanent plans that come with a lot of benefits. These benefits include savings accounts and low premiums. They do come with the flexibility of a variable life insurance plan in the ability to adjust payments or death benefits as need.

It depends on how you set up the plan on the type of premium of select and the ultimate cost of it. The costs of the insurance are minimal and can vary for age, insurability and the degree of risk.

Can you afford the premiums?

One of the biggest factors in determining your life insurance policy is your ability to pay on it over time. If you fail to make payments, the policy will lapse and you will lose everything you have been putting into it. You need to figure out the extent of what you can expect to pay every month for the rest of your life or the rest of the term you select.

Having additional savings accounts and investments make this easier to set up and prove to an insurance agent. This shows you are able to regularly contribute to a savings account and balance an already established portfolio. The risk they are prepared to take with you is lessened by this stability.

Do you understand the Policy?

Talking with these insurance agents and researching with the companies across their websites and brokerage firms is a good start, but if you do not understand the policies or the benefits and determents of all of them you might want to talk with a financial advisor outside of these companies. Instant approval insurance might be a good consideration.

Which Type of Insurance Policy Will You Choose?

Getting a life insurance policy is a good way to protect your family. It requires time, research and patience while you figure out what will work best for yourself in the long term.

Talking with a neutral financial advisor is a good place to start because they will have no vested interest in how you make your decision.

Once you understand what you want talking with agents from multiple insurance companies will provide you with the tools you need to figure out what will work best for you and your family.

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