What Should I Know About Buying Life Insurance

October 22, 2007

Posted by thefarm

( 2 ratings )

1. Determine Your Needs
Work with an insurance agent to evaluate your insurance needs and obtain as much information as possible about available polices

2. Your Extent of Coverage
Determine how much coverage you need, and what you can afford to pay. Don't end up in a position where you don't buy enough life insurance to cover the financial effects of an unexpected or untimely death. Ask your self: how much of the family income do you provide? Does anyone else depend on you financially? How will your family survive and repay debts if you were to die.

3. Compare the Different Kinds of Life Insurance Policies
There are two types of life insurance policies: term insurance and cash value insurance. Term insurance generally has lower premiums in the early years, but does not build up cash values that you can use in the future. Cash Value life insurance may be one of several types: whole life, universal life and variable life. Your choice should be based on your needs now and in the future and what you can afford.

4. Make Sure You Can Afford the Premium Payments
Simple enough, but so many fail to do the math. Work with your agent.

5. Find a Good Insurance Agent
Seek recommendations from friends and professionals such as your lawyer or accountant. Make sure he or she specializes in the service and products you need. You also may want to ask the person if he or she has received any special certifications such as Chartered Life Underwriter (CLU) or Chartered Financial Consultant (ChFC).

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