September is Life Insurance Awareness Month, and as we wrap up this month, I wanted to do a recap on the most important things you need to know about life insurance. This blog will teach you the 10 Things You Need to Learn About Life Insurance.
Purchasing life insurance is an important decision and a major commitment. Before you sign the solid line and buy your policy, get the facts, and find answers to any and all of your questions.
If you would like to listen to the podcast episode, click here
1. Don’t put it off.
You know you will need life insurance sooner or later, and now is the best time to buy it. The younger and healthier you are, the cheaper your premiums will be.
If you’re young and single, need coverage, and don’t want to pay expensive premiums, consider getting Term Life Insurance. Level Term insurance is the most affordable life insurance on the market.
There are 5 different types of term insurance so make sure you get the one that is best for you, be sure to check out my podcast episode on 5 Types of Term Life Insurance to learn more.
2. Shop around.
Before signing the solid line, take the time to browse the market. Learn about the various insurance companies, review the different policies available, and compare rates.
Policygenius is an online insurance marketplace combining cutting-edge technology with the expertise of real licensed agents to help you find coverage to protect your family.
Doing a little homework today; can be the difference of saving towards your monthly premiums, plus ensuring that your loved ones will be adequately protected. To compare and purchase coverage today, the link will be in the description box https://share.policygenius.com/simple.
3. Stay Healthy.
People with healthy bodies and smart lifestyles pay the lowest premiums. People who smoke, drink, take drugs, are obese, or even have poor driving records will pay much more for life insurance.
Commit to living a healthier lifestyle by getting help overcoming addictions, exercising at least 3x/week for 30 minutes, and cooking more than you eat out.
The healthier you are, the better coverage you can secure at the best price. The more unhealthy you are, the more at risk for death you are, which could force you to pay higher premiums for the minimum amount of coverage.
4. Find the right amount.
Most people find out after the sudden death of a loved one that the deceased was underinsured, meaning they didn’t leave enough to cover their burial plus take care of the loved ones that they leave behind.
You are advised to get coverage that can replace anywhere between 10-15 times your annual income. Here is a life insurance calculator to determine how much you’ll need https://www.policygenius.com/life-insurance/life-insurance-calculator/.
Factors to determine coverage include age, gender, annual income if you’re married, the number of kids you have under age 18, total household debt, and savings.
5. Save money with more coverage.
If you can afford to, consider increasing your coverage, as premiums tend to get cheaper as coverage amounts increase.
Consider getting the maximum coverage you can afford for your age and health. You may be single today, but if you get married and/or plan to have kids, they’ll appreciate you thinking about them in advance.
You may also consider adding riders to your policy, such as converting your term to a permanent policy, long-term care rider, and other riders that can be purchased for your particular policy.
6. Review your plan.
It’s important to review your policies whenever you undergo a life-changing experience. If you have a child or are entering college, consider how your policy may be affected.
If you buy directly through an agent, they are supposed to contact you annually to see if you have any life changes, such as getting married, divorced, having kids, or experiencing financial instability.
Whether your agent contacts you or not, you should contact them with any new updates to ensure that your policy offers the best coverage.
7. Don’t pay unnecessary commissions.
Many insurance companies charge high premiums that include the commission of the agent and/or broker. Seek out a policy that contains none of those hidden costs.
Due to hidden commissions and fees, most insurance policies connected to the stock market will usually be more expensive.
Make sure you are getting the policy that best fits your needs, that has the lowest fees, and if your agent is getting paid commission, ask how much of your premium is going towards paying them.
8. Don’t count solely on your employer.
Group life insurance is a nice benefit, but it may not be enough to meet your needs. Additionally, most group life insurance policies are terminated should you leave the company.
If your employer offers group life insurance, get it, but consider getting independent life insurance if you plan to leave your employer.
To learn more about the pros and cons of group life insurance, check out my podcast episode, Should I Buy Group Life Insurance with My Employer? Click Here
9. Choose annual payments.
You will pay a higher premium if you pay your life insurance monthly. To save money, change your plan to pay your premiums annually.
If you can pay your premiums in full every year, you can save up to 5% on your annual premiums. 5% may not seem enough, but consider how much you will save over the policy’s life.
Not every company offers annual premium discounts, so ask your agent. If the discount seems reasonable, include it in your annual budget, and set a reminder for the date that the money will be withdrawn, to avoid your account over drafting.
10. Tell the truth.
Never lie or hide information when applying for life insurance if you are found guilty of hiding the facts, such as trying to cover up a smoking habit.
Lying on your application could have serious consequences, such as your beneficiaries not having access to the death benefit and the company having the right to terminate your policy at any time.
Take your time answering the questions on your application, and answer each question as honestly as possible to avoid facing consequences.
Choosing a life insurance company and buying a policy are important decisions, and there’s no such thing as too much information. Find out all you can and ensure you receive the best coverage before committing to your new life insurance purchase. These are just 10 things you need to know about life insurance, but there is much more to learn.
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