Like many people, you may be confused as to the type of life insurance best suited for you. There are quite a few factors and options to consider. Financial planners recommend that a potential policy holder review their particular needs and compares features and providers. You should think about not only your current goals but also your future goals. And after you choose a policy, it is a smart idea to periodically evaluate your coverage; sometimes changes must be made to fit new life situations.
The type of life insurance you choose will depend on your lifestyle. For instance, if you are employed, have several dependents and are still upside down on your mortgage, your insurance needs will differ from someone who is retired, does not have dependents and has paid off their mortgage. In these scenarios, the younger parent should buy enough life insurance to support the children and pay the mortgage. The older retiree needs to purchase insurance to cover their end-of-life expenses.
Do not forget to plan for the future when choosing a life insurance policy. If you are currently a parent of minor children, you will need a higher level of coverage. Once your children are independent adults, you can lower the coverage amount. Some people buy whole life policies and supplement them with term life insurance that lasts until their children reach adulthood.
You have several categories of life insurance from which to choose. A term life policy generally offers a low monthly premium, particularly when purchased early in adulthood. However, a whole life policy has premiums that do not rise as the holder ages. It is also possible to earn interest on certain policies. Other policies let the holder borrow from the principle or the accrued interest.
There are additional options you can add to a life insurance policy. Terminal illness payments allow a portion of the policy to be “cashed out” in order to cover bills associated with a terminal illness. Mortgage repayment is another extra choice you have. This option automatically pays the mortgage left on your home. Accidental death coverage is also a popular choice because the payout is increased if you were to die in an accident.
When shopping for life insurance, get quotes from a few different companies. Some companies offer discounts for those who have an auto insurance or homeowner’s insurance policy through the company. Your employer may even provide term life insurance. If so, you could possibly be able to buy more coverage at a group rate.