What To Consider When Choosing Life Insurance Coverage

Life insurance is an important financial decision to safeguard your family’s financial future. Choosing the right life insurance is not a decision to take lightly.

Luckily, there are a few key things to consider as you choose life insurance to help make the decision process that much easier.

Take stock of your motivation

Before looking into any policy, assess your motivation to get coverage. Some individuals decide to get a policy to replace income for loved ones, while others want to be thoughtful about not leaving their families in debt, securing a policy to pay off the mortgage. Get clear about your “why,” and be ready to speak about that with your family, loved ones, and any insurance companies or brokers you meet. 

Have your documents in order

While each life insurance company may differ in what they will ask for on your application, getting your identification and personal information ready makes sense. You’ll want to gather your driver’s license or identification card, Social Security card, financial information, medications, and healthcare records. An insurer is likely to also ask for your date of birth, gender, marital status, and occupation.

Explore coverage types

Different types of life insurance coverage are available, including term life insurance, whole life insurance, and universal life insurance. Each policy differs in the duration of coverage, the cost of premiums, whether a medical exam is required, and whether the policy can accrue cash value. No matter if you’re doing your own research or working with a company or broker, commit to researching each type and getting all your questions answered before applying for any specific type of policy. 

Consult with a professional if needed

While everyone’s needs vary, you may find it helpful to consult a professional, including an insurance company representative or broker, to help you fully understand your life insurance coverage options. An experienced broker or agent can help ensure you’re comfortable with the policy, understand how to assign beneficiaries, and answer other questions that may arise during the application process.

Be attentive about premiums

How much a policy costs is an important consideration as you choose coverage. Your policy will require monthly or annual premium payments, which you’ll need to keep up with, so the coverage remains active. Consider setting an alert or reminder to ensure you pay premiums. This guarantees the death benefit will be available for your loved ones if the worst happens to you.

Feel safe and supported

One of the intangible benefits of a life insurance policy is the peace of mind you’ll have knowing your loved ones are protected if the unthinkable happens. After you have chosen your coverage, you and your loved ones can feel supported should anything arise down the road. 

Disclaimer: The primary purpose of permanent life insurance is to provide a death benefit. Using permanent life insurance accumulated value will reduce the death benefit and may affect other aspects of the policy.