There are several factors that will determine whether or not you need life insurance. Here are some tips on how to choose a policy that is right for you.
* Who should buy life insurance? Life insurance is recommended to those who have dependents, those who are self-employed or own a business, and those who want to ensure that their surviving spouse will have enough funds to cover funeral and burial expenses as well as any outstanding debts or taxes incurred.
* How much insurance do you need? This is also dependent on several factors. In addition to the expenses already mentioned, you may want to cover education costs for the children. You may also require a supplemental safety net in case a situation arises such as illness or if you need to borrow money.
While some experts agree that most people who buy life insurance do not buy enough, others will say that most people buy too much. How much is enough is determined by how much debt has been incurred including mortgage, credit card debt, tuition and expenses, and the needs of the surviving spouse as well as the children. Once that calculation is made, one can then ascertain the amount of coverage needed.
* What type of insurance should you obtain? There are two types: term life and whole life. Term life is insurance that is only good for a specific period of time, whereas whole life insurance has no expiration and allows you to borrow from the policy or cash it in.
Term life insurance varies in cost. Depending upon your age, whether or not you smoke, your current health, and income may inflate the cost of this type of policy. But, in general terms, term life insurance is usually affordable.
* Understanding the types of life insurance available is critical. It is recommended, therefore, that you research each type as well as the insurance companies who provide the policies. Then set up an appointment with at least five agents to obtain proposals that you can compare and contrast.
Once you have decided on the type of insurance and the insurance company, think about it before signing on the dotted line. Ensure that this policy meets all your needs.