| Most consumers may find purchasing life insurance a confusing and intimidating
endeavor. According to LIMRA (Life Insurance Management Research Association)*,
48 million American households feel they need more life insurance, yet many
will not make the decision to purchase for two reasons, one being that they
find it difficult to decide how much to buy and secondly, they worry about
making the wrong decision.
"Choosing the right coverage and the right policy doesn't have to
be complicated or confusing,"
We take the mystery away from that process by offering tips and resources
to empower you to make the appropriate choices to ensure your family and
loved ones are protected in the event of your death."
Before speaking to an insurance professional, here are the key questions
to consider:
- What are my options? There are two types of life insurance: permanent
and term. Permanent life insurance offers protection for a lifetime
while term offers protection for a specified amount of time. Both have
their advantages and disadvantages so it is best to speak to your insurance
professional about which one will suit your needs.
- How much will I need? Take a comprehensive look at your personal situation,
taking into account the total economic contribution you will make to
your family and loved ones over a lifetime, such as income, benefits
from your employer, and other avenues of income, minus personal consumption.
This should give you an estimated coverage amount that can help you
start a conversation with your insurance professional.
- Is life insurance affordable? It can be, so shop around for a policy
that will suit your personal and financial needs. Be sure to know what
you'll be getting for your money by asking about a policy's renewal
and withdrawal provisions; riders; cash values; dividend payouts; and
term-conversation options. The answers depend on whether you've decided
to purchase a term or permanent life insurance.
- Which life insurance company should I choose? This shouldn't depend
solely on cost. Your insurer will need to be there to pay out your policy
when your loved ones will need it the most. Therefore, make certain
that the insurer is financial stable and secure by reviewing ratings
from independent companies such as Standard and Poor's, A.M. Best, Moody's,
and Fitch. Also, call your state insurance department or the Better
Business Bureau for further information before you choose an insurer.
- Is your employer offering an employer-sponsored life insurance program?
Consider participating in your group insurance program if one is available
to you. At the same time, you may want to consider purchasing individual
coverage.
- What if I already have a life insurance policy? Please be sure to
update your beneficiaries and review your policy as significant life
events occur, such as purchasing a new home; getting married or divorced;
welcoming a child into your life; opening a new business or retiring
from your job.
* Trillion Dollar Baby: The Sales Potential of the Underinsured Market,
LIMRA International, 2005
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