While you probably know how important life insurance is to you and your family, some of the finer details may be a mystery if it’s your first time buying a policy. Having a good understanding of life insurance and how it works is crucial, however, as you can rest assured that your family will continue to be cared for after you’re gone.
3 Tips for First-Time Buyers of Life Insurance
1. Consider the Future (& Present)
When determining the proper amount of insurance, consider your current living expenses for your family. From there, take into account future expenses, such as medical costs, college tuition, and income replacement after you’re gone. You want to look at the big picture to ensure you’re setting coverage limits high enough to offer suitable financial protection. Additionally, if you find that your current and future expenses cost more to insure than you’re able to pay, opt for as much coverage as you can reasonably afford. Some protection is better than no protection at all.
2. Choose the Right Policy
Term life pays out over a specified term, which can range from 10 to 30 years. If you outlive the term, the policy will be void and your family won’t receive death benefits. Whole life insurance pays out as long as you make premiums and also offers cash value, making it similar to an investment tool. This coverage is more expensive, but it does offer greater peace of mind. Your insurance agent can help you decide which policy is right for you.
3. Ask Lots of Questions
Once you’ve sat down with an agent, ask questions about any components you fail to understand. For instance, can you convert a term life policy to whole life if you outlive the term? How are the proceeds from life insurance policies left to beneficiaries? Most policies are convertible, as long as you do it within a certain frame or by a certain age, but it depends on your insurance agency. Additionally, there is flexibility with payouts. Your agent can help you determine if a lump-sum payment or an installment payout option is better for your beneficiaries. Getting the right guidance is a must for a decision as serious as insuring your family after you’re gone.
Tim Bryan Insurance and the rest of the team at State Farm know that purchasing life insurance for the first time is a daunting prospect. That’s why these agents go above and beyond when explaining policy details, so you can make the best decision. They also offer a variety of other insurance products to families throughout Andalusia, AL, including home insurance, auto coverage, health insurance, and policies designed for small business owners. Visit the website for details on office hours and location. If you’d like to receive a personalized quote, call (334) 222-1460 today to speak to an agent.