Purchasing a life insurance policy is a convenient, efficient way to ensure your loved ones are taken care of in the event of your death. There are multiple factors that should be considered when purchasing a policy, as well as many different policy variations to review. To help narrow down your choices, ask yourself three questions.

3 Questions You Should Ask Before Choosing a Life Insurance Plan

1. What Are My Policy Options?

The two most common types of life insurance are term life and whole life. Term life insurance is typically the least expensive and allows you to choose the length of the policy. However, when the term ends, the policy is finished, which means you lose the money you invested, as well as the coverage.

Whole life insurance lasts forever, unless you allow your coverage to lapse. This type of policy is usually associated with higher monthly payments, but you don't have to worry about not benefiting from your investment later down the line.

2. How Much Coverage Do I Need?

There are many factors that should be considered for deciding the size of your policy. The goal is to prevent your family from being stuck with your expenses. The average cost of a funeral is between $5,000 and $10,000, which alone, is enough to create a financial burden for your loved ones.

First, add up your total amount of debt, including student, auto, and home loans. Combine this number with the average cost of a funeral, and you've found the minimum amount of life insurance coverage you need.

If you're the head of your household, you may also want to consider living costs for your family. Even with a paid off mortgage and automobile, they will still be required to pay property taxes and utility bills, as well as purchase food and clothing. Estimate your needed coverage level by multiplying your yearly salary by five and adding it to your minimum policy sum.

3. What's My Budget?

Another factor affecting your policy choice is your budget. While the idea of a million dollar life insurance policy may be enticing, the reality of the monthly payments may not fit your current income. Take a look at your current budget, determine a comfortable amount for you to pay each month, and ask your insurance agent which plans to consider.

Find the right life insurance for your situation by contacting Steven Hall - Farmers Insurance. Located in Mountain Grove, MO, the trusted insurance agency provides a personalized approach to ensure each client finds a policy that meets their budgetary needs. Get in touch with Steven Hall by calling (417) 926-7900, and learn more about the Farmers Insurance agent's options, including auto and health insurance by visiting him online.