Having life insurance is generally a good idea since it can protect your loved ones from a loss of income if you pass away. However, much confusion surrounds the process of getting a policy online. There are a few things you will want to know before making your purchase.
Know You Don’t Need to Keep a Policy Forever
You don’t have to be locked into whatever policy you decide to go with, since you can sell it later if needed. With a life settlement, your beneficiaries would no longer receive a death benefit, but you would receive a cash payment for the policy. If you are thinking of going this route, you can review a guide on everything you need to know about selling your life insurance through a life settlement.
Understanding Your Coverage Needs
It’s easy to underestimate the coverage you need, especially if you are in debt or have dependents. You might only think about the amount you would need to pay off a mortgage or other debt. But you should also consider the amount you would need to help your significant other pay the bills. And if there are kids, you’ll want to think about their expenses, including college tuition. You could get coverage that is equivalent to 10 times the amount of your annual income. Still, your situation might demand an even higher level of coverage, so use this number as a starting figure. You could get advice from a financial planner to help you out.
Think About More Than Just the Premium
Of course, you should consider the amount you pay for a policy, or the premium. You do need to be able to afford to pay them each month. However, you should consider more than just how much the policy costs, as this is something that can provide financial protection to your loved ones. If your policy comes with a cash value, its other costs are equally important to the premium. And if you are getting a universal policy, you will want to think about the non-guaranteed and guaranteed aspects of the policy.
Make sure you get it from a reputable seller. The company you acquire your coverage form are also important, since they should have great financial ratings. Look at the ratings independent ratings agencies have given them. And if you are working with your agent to obtain coverage, you can ask them about different companies’ ratings.
Submitting Your Application
You can expect to answer many questions as you are filling out the application. That’s because the company wants to determine how risky it is to cover you. The initial quote is only an estimate of how much you will be paying each month. But you can also expect to answer questions about your medical history, mental health, and whether you use any tobacco products. You might even be asked questions about your hobbies, since some are more dangerous and can make you risky to insure. And often, questions are asked about applicants’ driving records. Your answers will determine the exact rate you pay.