Things to Examine When Buying a Term Life Insurance Policy
If you’re an adult with a family, kids, and financial liabilities, you probably have life insurance or are considering buying one. It offers monetary protection to your loved ones who are dependent on you financially if something unfortunate happened to you.
However, purchasing a life insurance policy isn’t easy, as there are several aspects to be taken care of. Different policies offer different benefits, and to buy the policy that best suits your needs, you need to understand what you need and how various policies work.
Nature of the Policy
One of the primary questions to ask before buying an insurance policy is if you want a term life policy or whole life insurance. A term life insurance policy lasts for a certain period, say when kids are growing up or until you retire.
A whole life insurance policy will last for your entire life until you die. According to Global Life Insurance reviews, the company offers different kinds of policies:
- Term Life Insurance for Adults
- Whole Life Insurance for Adults
So, you can choose the one that best suits your requirements. If you want an insurance cover for your financial needs, go for the term life insurance policy for adults that offer coverage up to 90 years of age beyond which the policy expires.
Duration of the Coverage
If you are planning to buy a term life insurance policy, you should consider the duration you need the coverage for. Buy a term policy that covers you until you retire as your liabilities decrease with time. For instance, it does not make sense for a 30-year-old guy to buy a term cover for 50 years.
The Amount of Insurance Cover Provided
This amount would be paid to your beneficiaries if you were to meet with an untimely death. Naturally, this is important as the primary goal of a life insurance policy in the first place is to leave your dependents financially secured.
The amount of coverage you might need depends on several factors like your dependent’s monthly income, your liabilities, your current and liquid assets, retirement corpus, future inflation, etc. Once you have a rough estimate, you will be in a better position to choose a policy.
Check the Affordability of the Premium
This is a crucial point factor. You’re buying a term cover to help with your financial liability. Therefore, there is no use buying a cover if it proves to be a burden for you. Check the premium rates carefully and consider other costs and make sure you’re purchasing a policy with a premium that you can afford.
For instance, the Globe Life Insurance reviews mention that the company’s term life policy rates increase every five years. Therefore, it is best to get complete and honest information about the costs and premium rates to avoid troubles later.
Check Health Conditions and Policy Exclusions
Most life insurance policies have health inclusions. Hence, anybody with a critical illness or underlying health conditions may find it challenging to buy a policy. As a result, many people tend to hide information.
Insurance agent Gary P Cubeta says it is essential for complete disclosure about health conditions and answer all the questions honestly to avoid any hassles later. If you are honest about your condition, your agent may be able to find you a policy that accepts your condition and offers you a policy suitable for your requirements.
Name a Beneficiary
You must include the name of the beneficiary in the policy. The beneficiary is the person who will receive the proceeds in the event of your death. Choose the name wisely and responsibly.
Avoid giving the name of the child who is a minor as he won’t be able to receive the funds or an elderly who may not be around to receive the funds when the time comes. You can include the name of either spouse or siblings who is financially dependent on you.
However, if you want the proceeds to go to charity or benefit your business, you will have to have proper documentation and a plan in place. Talk to an insurance agent about the same.
Where to Buy a Policy
Many employers and civic organizations provide a life insurance cover. It is important to ask and know all the details about it. However, if you are to buy your insurance, it is best to do some research on insurance companies.
If you’re new to all this and have no idea how insurance works, it is always better to go through an agent as they will be in a better position to understand your requirement and suggest the best policy accordingly.