How to Choose a Life Insurance Policy
When deciding what kind of insurance policy to buy, there are many factors that you should consider. Purchasing a life insurance policy is a large an expensive decision and should be thoroughly considered before any money is spent on a policy.
Term vs. Whole
The main decision to make is to decide if you should purchase a term policy or a whole policy. A term policy is much cheaper and lasts for a certain number of years. A whole policy is very costly but lasts until death and has a guaranteed payout.
When deciding between term and whole life policies, consider the needs of your family or loved ones that will be left behind should you die. How much will they need to live comfortably? How much do you make annually? Most insurance providers suggest taking out a policy that is approximately 10 to 20 times your annual salary. So, if you make $100,000 a year, consider purchasing a policy that is worth $1,000,000 to $2,000,000.
Another factor to consider when making this decision is age. Generally, younger people should take out a term policy. This will save you money over time and will allow you to purchase a larger policy for less cost. If you are older, it will be almost impossible to purchase a term policy since you are more likely to die before your policy expires. You will most likely be required to purchase a whole life policy which will be more expensive, but that has a guaranteed payout.
Take into consideration those who will benefit from your policy if you pass away and how much they will need. If you are single, consider the cost of burial and think about getting a policy that is large enough to cover those costs so they are not left to your parents or family.
Finally, fill out the form on our site to speak with a licensed life insurance provider who can walk you through every detail about life insurance and who can educate you and help you make the most informed decision possible. Get a quote today!