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Buying life insurance is a priority if you want an assurance that your family will be financially stable after your passing.  Benefits received from a life insurance policy can play a vital part in your family’s well-being.  We all find shopping for the right coverage that fits your needs can be a bit daunting.  Fortunately, we can always research or use tips like those that follow to assist us in buying life insurance for ourselves.

Steps To Consider When Buying Life Insurance

  • Determine your need for life insurance coverage.  There are many situations where you may not need to purchase coverage.  You may not need life insurance if no one depends on you financially.  If you have no debt and your estate can pay its own taxes and expenses you may not need coverage.
  • Consider other options you may have for your life insurance such as saving for other purposes than paying for death benefits.
  • Choose which type of life insurance meets your needs.  There are three types of life insurance policies such as term life, whole life and universal life.  Term life insurance offers lower premiums and coverage is only for a specific period of time.  Whole life insurance accumulates a cash value and pays a benefit on the death of the insured.  Universal life insurance offers flexible premiums along with increases in death benefits and a tax-deferred investment option.
  • Ask if you need to add any riders to the policy.  Two riders to consider are waiver of premium and guaranteed insurability, some policies will have these included.  Waiver of premium pays the life insurance policy premium to you if you become disabled.  Guaranteed insurability allows you the option to add death benefit without the need of requesting evidence of your health status.
  • Shop around as quotes vary between companies and many have different ways of saving you money.
  • Choose to pay premiums annually, it may make a difference if fees are added for to paying monthly installments.
  • Make sure to tell your beneficiaries about your life insurance policy.  You need to inform your beneficiaries when policy is issued, where to find paper copy and how you want them to proceed with the death benefit.

Calculate How Much Life Insurance Your Family Needs

  • Will my family have any financial resources after my death?  There are three categories to consider as far as resources: Social Security or retirement survivor benefits; group life insurance and other assets.  When looking at resources you should also keep in mind as to when these funds would be available.
  • What financial need will my family need after my death?  Consider that your family will need to pay for funeral expenses, debts and income to stay on track financially.
  • You have considered the importance of buying life insurance for your family but how much do you need to purchase?  Take your family’s financial resources and subtract their financial need, this will help determine the amount.