Purchasing life insurance can be one of the best things you do for your family. In the event of your death, it can offer financial support, and therefore, peace of mind. Because of this, it is incredibly important to plan for your future. With that being said, here are a few tips so that you may avoid some common mistakes when planning for life insurance.
This tip is pretty cut and dry. Don’t wait to plan for your life insurance policy. The sooner the better. One of the biggest problems surrounding the life insurance industry is the stereotype that it is only for senior citizens. Life insurance is certainly not exclusively for senior citizens; it can be offered to anyone with a family or dependents. The younger and healthier you are, the cheaper your premiums will be. Life insurance agencies tend to look at your current state of health when you apply for a policy, and if you’re older and unhealthy, your premiums will be much more expensive; and depending on the severity of your state of health, you may not be able to even purchase a policy at all. Don’t delay, do it today!
Consider Buying Permanent Insurance
There are two, basic kinds of life insurance: term and permanent. Term life insurance offers coverage for a certain amount of time before expiring, requiring you to re-apply; permanent life insurance, on the other hand, is, well, permanent. It is a policy that you hold for the remainder of your life. One of the largest differences between the two is the price of premiums. Term policies are cheaper, while permanent policies have more expensive premiums. It may seem silly to go for a permanent policy if you can simply have a term policy and pay less for premiums, but permanent policies feature a fantastic benefit: cash value. The longer you hold a permanent policy, the more cash value it will gain, which you can then cash out for later in life. This is usually not the case with a term policy. Most policies also come with a death benefit, which is only available for a limited amount of time, whereas with a permanent policy, you can utilize this at any time.
When planning for your future, be smart and think critically. Don’t wait too long for a policy, and know your limits. Ask questions and get opinions. But, when all is said and done, make sure to go with a policy that works best for you.