Tips for first Time Life Insurance Buyers

There are few certainties in life, but one sure thing is that we’ll all eventually die. With this in mind, purchasing life insurance can be of ultimate importance, especially when you have dependent family members who depend largely on your income. Because there are so many different types of policies and different companies to choose from, it is important to be prepared when buying such an integral factor in the future of your loved ones.

1. Choose a reputable company that has been in business for a long time. Often, large insurance companies you already use for your car insurance or house insurance probably sell life insurance, also. Since you have probably already established a relationship with these agents, you might feel more comfortable discussing policy options with someone you know and trust.

2. Take a realistic approach. Decide how much money your spouse, children, or other dependents will need to survive if your income were taken out of the picture. Also, be sure to figure in funeral costs and any outstanding bills you have. Agents will help with these figures, but the ultimate decision is yours. If you already have a solid amount in mind, the chance of the agent’s talking you into a much different amount will be minimized.

3. Read and discuss all the information before you purchase – remember: the large print giveth, the small print taketh away. Make sure you understand the differences in term life, full life, and policies that build up cash value that you could borrow against for things like buying a house or sending a child to college. Decide if the extra benefits are worth the added cost for your particular situation.

4. Decide who your beneficiary will be. Choose a second beneficiary in case the first precedes you in death. This is very important since life insurance policies are not dictated by wills. For example, if your will says Cousin Sally gets everything when you die, but Aunt Polly is the primary beneficiary on your insurance policy, Aunt Polly will receive the insurance benefit – not Cousin Sally.

5. Make sure your understand any exclusions in your policy, like pre-existing conditions or suicide. These differ greatly among the hundreds of insurance carriers.

6. Start early in life and pay your premiums on time! The younger you are when you purchase a policy, the lower your premiums will be. Don’t get behind on paying your payments. You could pay on a policy for years, then miss a couple of payments and be canceled. All the payments you have made over months and months would be lost.

No one wants to think about his own mortality, but it is a certainty of life. Being prepared for the inevitable will give you peace of mind, knowing your family will at least be taken care of financially in your absence.