An overview of what a life insurance policy is and its benefits. Also discussed are many of the factors that affect insurance rates and what you can do to get the best rate possible.
Everyone should own some sort of life insurance policy to protect there financial security. There are many factors in determining how much coverage one may need and they should all be considered in choosing a policy, life insurance is generally cheap and you should not skimp on coverage.
The best time to buy coverage is when you are young and healthy and if you are a smoker quit as soon as possible, this is a huge factor in policy premiums, you will generally pay triple or more if you are a smoker so its in your best interest to quit. The younger you are the cheaper the policy will be and one nice thing about term policy is that the premium is level which means it will not increase over the years like other types of insurance policies.
Another factor to consider is the amount of coverage that you may need. You should have enough coverage to pay off your house, pay all the bills for years to come and enough for your spouse and children to live off of till they are old enough to go out on their own. You can set up a policy if you wish to actually pay your beneficiaries a set amount every year so they don’t burn through the money, this amount is usually set at your yearly income with an inflation factor added in every year, but you can set it up how ever you like. If you are unsure of how much coverage you need to purchase talk to a financial advisor to help you evaluate your needs.
Other factors that must be considered is your current health history. This is a very big factor in determining rates and as long as you are healthy you should have no problem. If you are sick there are guaranteed issue life products you can purchase if you can afford them, they are generally very expensive but it will give you a certain level of protection. What ever you do, do not lie on your application to get coverage, life insurance carriers have access to all your medical records and they will almost always catch missing medical information on your application. This will lead to a rate increase of your premium or a policy rejection, which you do not want. Other important factors life carriers look for is if you are alcohol or chemical dependant, this will almost always be a denial, even if you have had a DUI it will generally lead to a policy rejection. They also want to know if you have any bankruptcies in your past, they look at you as an investment and they don’t like to make bad ones.
If you feel that you cannot afford a large policy than at least consider purchasing a final expense policy that would pay for your funeral expenses. These are generally inexpensive and usually have a face value of fifty thousand dollars or less. This would relieve your family of the cost associated with burial cost, and some insurance carriers will actually deal with the funeral home directly to further ease the burden of loosing a loved one.
This information is a lot to consider when shopping for a policy. It is almost always to go to an independent broker because they will be able to give you best value for your hard earned dollar. They generally have access to the most carriers and they don’t have loyalties to any one carrier which is best for you the client.
Term Life Insurance
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