Life Insurance Tips

Do you need Life Insurance?

A large majority of people will need life insurance eventually, but that doesn't mean now is the right time for you to purchase a policy. Before looking for a policy that fits your needs, ask yourself a few preliminary questions:

• Are you a full-time worker?
• Are you a homeowner?
• Are you newly married or retired?
• Are you a parent?
• Are you a caregiver to your spouse or children?

If any of these questions apply to you, then now might be the time to think about getting life insurance. This form of insurance is meant to help secure finances for family members should a parent or spouse unexpectedly pass away. This can protect your family by paying for the mortgage on the house, funding your child's college education, allowing some retirement funds, and much more.

Even if you feel you do not need life insurance at this moment, it is a great idea to begin researching the subject early on, and possibly even start with a “beginner’s policy.” The primary reason for starting early is because life insurance only gets more expensive as you age.

The bottom line: Life insurance is an important option if your income supports anyone other than yourself.

Figure out how much you need

What your family receives upon your death is known as a death benefit. To figure out how much life insurance you need, you can use either an online calculator for a more precise estimate, or you can use an easy formula for a quick estimate. The simplest formula is to multiply your annual salary by 8.

Regardless of your estimation method, it's important to realize that they are, in fact, just estimates; no calculator on the Internet can give you an absolute value that you can expect to pay, or exactly what’s best for you. They're hypothetical estimations based on possibly outdated averages and only based on the information that you provide without verification or fact checking. However, it can help to use these tools to understand more about how the different factors of your life can affect the potential cost.

Get the right policy

After narrowing down a potential range of required coverage, the next step is to think about what sort of policy works best for getting that coverage. Two main options exist: The first is term life, which offers a premium that your wallet can handle better, and the second is whole life, which offers much more depth to its coverage and can even accumulate cash value.

Within these two categories, there are considerably more options to look at and evaluate. This means taking the time to do your homework; proper research is absolutely vital to knowing what kind of coverage you should get for your life insurance policy.

Verify provider quality

The insurance policy can look great on paper, but it doesn't matter if the company backing it isn't very reputable. Ensure you only work with a company that you feel comfortable with, and confident they will stick around for the duration of your coverage.

Seek the advice of a financial professional

By speaking with a (or your personal) financial professional on the subject, you can uncover additional considerations that can help narrow down the right life insurance policy choice for your needs.