A loss of a loved one can cause heartbreak for a dependent family. A loss of a breadwinner could cause a significant loss of income for a family already going through grief. It can also lead to financial difficulties. If the worst happens, life insurance can be one of the best ways to protect your family’s finances. This collection of life insurance tips can help you get started. Our agency is an independent insurance agency that offers all types of insurance. We have been successful because we always put our clients’ needs first.
There are many confusing options when it comes to life insurance. If you don’t know what you want, you might end up spending thousands on a policy that isn’t right for you. These are the top life insurance tips to help you select the best option for you.
Make sure you know what you need.
There are many types of life insurance, so ensure you choose the right one. The easiest type of insurance to purchase is level term insurance. It pays out on your death and pays the same amount if you die during the term.
Do not confuse your insurance with another type of insurance
While other insurance may be linked to your life but not the same as real life insurance, it is still insurance. For example, mortgage decreasing term insurance is meant to pay off your mortgage but will not leave your family without any additional. Be aware of what you are buying.
Decide how much coverage you need
The rule of thumb is that you should have at least ten times your annual income until your children finish school. This is not difficult and you can choose to buy the best coverage for your budget. Consider the amount of debts that you have to pay off and ensure it is sufficient.
The better the price, the better
This is not car insurance. This policy will pay you when you die. It doesn’t matter if someone is deceased or alive, so it’s best to go with the lowest price.
Poor value can result from joint policies
While it is more affordable than buying two singles, the policy will expire when the first person passes away. Even if your spouse has been a member of a policy for many years they will need to start again after you pass away. This could prove costly if they get older.
Disclosing everything
Although you might pay a little more if your history includes heart disease or other conditions, it is better to be open about it when it comes time to purchase life insurance. You can also choose to buy a policy that will cover you for the rest your life. This policy won’t pay out if you don’t disclose any important information.
Stop smoking
You’re likely tired of people telling you to quit smoking. If you smoke, your premium for life insurance will be significantly higher. As a reward, you will receive a lower price on your life insurance if you are a non-smoker.
Your premium will be lower if you are healthier
Life insurance costs can vary depending on your health. It’s best to get it while you’re young and healthy. If you are a healthy 55-year old, you could pay a lot more than if your health is already poor.
Fixed price deals with guaranteed premiums are available
There will be two options for your premium: guaranteed or reviewable. Reviewable premiums deals are often cheaper, but your insurer will review them periodically and may increase their price. Guaranteed premiums mean that you will pay the exact same monthly amount no matter what. This means that you will know exactly how much you are paying for the entire policy’s life.
To keep the taxman away, write it in trust
It is simple to write a trust policy. Most insurance companies will assist you with this process when you purchase the policy. It becomes part of your estate and could be severely damaged by inheritance tax if you don’t trust it. It is easier to write it in trust than the rest of your estate. This allows it to be paid directly to your dependents and avoids inheritance tax.