If you are considering getting a life insurance policy, then you’ll want to get the right one that meets the needs of your family in case the worst should happen. The fact that you are thinking about life insurance is actually a good first step because it will lead you to thinking more about your future.
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You never know what the future might hold and the more you are prepared, the better off you and your family will be. Life insurance is arguably the most cost efficient means to protect the financial status of your family in case something should happen to you. Naturally, before you go running off to purchase a policy, you’ll need to set up a life insurance checklist first so that you can buy the right one.
10 Questions to Answer for Life Insurance Checklist:
The following are the 10 questions or considerations that you should take first before buying a policy. This life insurance audit checklist is one that will help guide you towards the right type and benefit amount that meets the financial needs of your family when the worst should occur.
Do I Need Life Insurance?
That is probably the most important question that you will need to ask before starting to look for a policy. Life insurance is for those who in the case of their death would cause a substantial financial burden on their family. This financial burden starts with the cost of the funeral, but includes the missing income that you generated to support your family. If you are the bread winner, then the need for life insurance is paramount. However, even if your financial contribution to the family is minimal, then having life insurance which covers the funeral costs would still be very helpful during this time of grief for your family.
What Types of Life Insurance are Out There?
There are basically two types of life insurance, term and whole. Term life insurance is active for a predetermined period of time usually from 5 to 30 years. Once that time is up, the coverage will end as well. Whole or permanent life insurance will last for as long as you pay the premiums. It is generally more expensive than term life insurance, but it is also the type of policy that generates interest and can be cashed out as well. There are also different sub-types of whole life, but they all fall into the same general category.
How Can I Get Covered?
There are three basic ways that you can get life insurance coverage, through your work, an agent or online. A survey says, more people are now applying for free online quotes to get their desired life insurance premium. You will want to check out all three ways first before committing to one because each of them has their own advantages. Many employers offer group rates which can be quite low, but going through an agent or online may offer more variety of benefits and premium payments.
Is Term or Whole Life Better for My Family?
The answer will depend on a number of factors, but generally speaking those who have reach the age where their children are grown and have saved up for retirement may only need term life insurance depending on their overall financial situation. Whole life is usually better for younger people who are still supporting their families or saving up to retire. Term policy is better suitable for seniors from 60 to 90.
How Big Should the Benefits Be?
The answer will depend on the amount of money that you generate for your family to pay the bills. A good starting point is roughly 7 times your annual income if you are the bread winner in your family. However, if you have retired then you might consider a smaller policy that covers funeral expenses and other final expenses.
Will My Budget Cover Paying for the Right Life Insurance Policy?
Most term policies are quite low and affordable, so if you are fairly young, in good health and do not smoke you can expect to pay a few hundred dollars a year for a policy that may be worth up to $1 million. However, more expensive forms of life insurance such as whole for example will cost more. You’ll need to look over your budget and calculate what you can afford before making the commitment.
How Long Should a Term Policy Last?
Since most people would be better off with term life insurance, you will want to have it cover your family until the point where your children are financially on their own or up to your retirement so that your spouse is covered.
Do I Need to Check Out the Insurance Company or Agent?
When you find the right policy to fit your needs, be sure to check out the source first. While most companies or agencies that offer life insurance policies are solid and reputable, there are those which are not so make sure you do the research first before committing yourself, only to find out that the company was not reputable at all.
Do I Need to Tell the Life Insurance Company Everything?
Well, you’ll need to fill out the application form accurately and answer all of their questions honestly. For example, you’ll need to inform them if you are a smoker otherwise they might find out during the blood or urine test to qualify for their insurance. Not telling the truth to the company about something pertinent to the life insurance policy may get you disqualified. There are no exam life insurance which is a great option for someone with indecent health condition.
What Happens if I’m Rejected?
It will depend on the reasons why you are rejected. If you are considered too old or in too poor of health there may be little you can do to get a policy. However, if the reason is a correctable one, then you can fix whatever it is and try again with another company.
By taking the time to go through the checklist, you can find yourself with a life insurance policy that will cover your family in their time of need. Having a good life insurance policy will bring you peace of mind as your family can be properly supported in case the worst should happen.
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