Buying life insurance may feel a bit overwhelming: you may not know exactly what you need or how much coverage is enough for your family. You also want to make sure you aren’t over-insuring yourself and paying for coverage you don’t actually need. Before you buy any kind of life insurance, here are a few things to consider and ask your broker about.
1. How much does it cost?
Many times, life insurance will be presented to you in terms of how much coverage you will be getting (e.g. $500,000 or $1,000,000 death benefit) but they don’t always tell you (up front) what it will cost you in premiums every month or year. You will want to know how much the premiums cost now – and whether they are likely to change in the future. Whatever insurance you ultimately get, it’s important to make sure that it works within your budget so you won’t have to cancel it later due to affordability.
2. Does your life insurance policy have living benefits?
You know that your life insurance will provide a death benefit if you pass away, and it will help to cover expenses and provide for your family. However, there may be a need to have some living benefits to your insurance policy.
In some cases, you may need long-term care if you fall ill or to pay for medical care costs. It can be helpful if the policy you have provides you with financial support while you’re still alive.
3. What benefits are guaranteed?
Before you agree to any kind of life insurance policy, it’s important to understand which benefits are guaranteed and which are variable. In some cases, policies will be sold as a variable which means the benefit will depend on how the market fluctuates and what its value is at the time of redemption. These policies may be out of your risk tolerance, especially if you know your family will need your help. Make sure you know what is guaranteed and that you are comfortable with those guarantees.
4. What if your health changes?
You will likely have to go through a health evaluation, in some form, when you first sign up for your life insurance policy. Your premium will then be determined based on your current health, but there could be conditions that you need to keep the same general health to get the benefit. If your quality of health rapidly declines, then you may need extra insurance to receive your benefits.
You’ll want to chat with your broker to determine what your policy will cover so there won’t be any surprises later on.
5. Can you purchase additional coverage if you need to?
You may be purchasing life insurance right now for just you and your spouse, but what if you decide to have a family and need a little more coverage to make sure your children are taken care of? As your life changes, your insurance needs probably will too.
You may be able to convert your term life insurance to something more permanent or purchase additional coverage if you have a child. This will be something to discuss with your broker before purchasing your policy and make sure you’re comfortable with your options.
Contact ICD Insurance today
If you are wondering about your life insurance options, our brokers are here to help. Not only will we answer all of your questions about life insurance, but we will help you choose the coverage that is right for you. Contact us today!