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10 Things to Know About Life Insurance
We all recognize the importance of life
insurance. After all, we want to make sure
that our loved ones are taken care of when
we die. But before you run out and purchase
a policy, do some research ahead of time.
That way, you'll be sure to get the best
possible coverage at the right price. Here
are some helpful tips to get you started:
1. Shop around
2. Never buy more coverage than you need
3. The healthier you are, the better the
rates
4. Buy sooner rather than later
5. Realize the importance of periodically
reviewing your coverage
6. You don't necessarily have to pay a commission
7. You may be paying more for monthly premium
payments
8. Don't rely solely on the life insurance
offered by your employer
9. Tell the whole truth and nothing but
the truth
10. Buying more is sometimes cheaper
Shop around
When it comes to life insurance, it pays
to shop around because premiums can vary
widely. And thanks to the Internet, it's
now easier than ever. Try out one of the
many insurance websites that can provide
you with instant quotes. Make sure the website
you shop from takes into consideration the
factors in your medical history that can
affect the premiums.
Never buy more coverage than you need
The key to purchasing the right amount of
life insurance is to have just enough coverage
to meet your needs. If you have more life
insurance than you need, you'll be paying
unnecessarily for higher premiums. On the
other hand, it's important not to have too
little coverage, resulting in you being
underinsured.
The healthier you are, the better the rates
It's true – healthy people get better
rates on life insurance. You will be asked
to pay a higher rate for anything that shortens
your life expectancy (e.g., if you smoke,
take medications regularly, are overweight,
have a bad driving record).
Buy sooner rather than later
If you've been putting off purchasing life
insurance because you don't want to pay
the premiums, you may be doing yourself
a disservice in the long run. The younger
you are when you purchase life insurance,
the lower your premiums will be.
Realize the importance of periodically reviewing
your coverage
Any life change signals the need for a review
of your overall financial plan. When it
comes to life insurance coverage, you'll
want to make sure that this major life event
(e.g., birth of a child, children are grown)
won't leave you underinsured or overinsured.
You don't necessarily have to pay a commission
One of the reasons for higher premiums is
that most life insurance policies pay commissions
to the agent/broker. However, you may be
able to purchase a no-load policy through
an insurer that sells no-load policies directly
to consumers.
You may be paying more for monthly premium
payments
You may not realize it, but you may be paying
more for your life insurance if you pay
your premium in monthly installments. Many
insurance companies charge extra fees if
you make monthly premium payments instead
of paying the annual premium.
Don't rely solely on the life insurance
offered by your employer
Many employers offer their employees some
sort of group life insurance. But this amount
of coverage is usually not enough to adequately
meet your life insurance needs. In addition,
group life insurance policies are not portable,
meaning that if you leave your job, you
can't take your life insurance coverage
with you.
Tell the whole truth and nothing but the
truth
If you're thinking about lying on your insurance
application, think again. If your insurance
company finds out that you lied about a
health-related condition or your lifestyle
(e.g., smoking habit), they may be able
to terminate your coverage.
Buying more is sometimes cheaper
Life insurance usually costs less per thousand
dollars once you get into higher coverage
amounts (e.g., $250,000). If the numbers
work out, you may be able to pay a lower
premium while increasing your coverage
by nsurance,com
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