Top 10 Life Insurance Tips You Need to Know

Life Insurance in Houston

We all want to know we’ve provided for our families when we die, but insurance is a complicated beast.

Nearly half of the American population say they don’t have enough life insurance coverage. Often, it’s because they’re confused by the options available. That leads to people putting it aside to worry about later.

A little knowledge can fix that. That’s why we’ve put together these 10 life insurance tips you need to know.

1. Decide If You Need It

First off, not everybody needs life insurance.

Although anyone can make use of life insurance, there are plenty of people without dependants or partners to think about. If you’re not providing for anyone else, life insurance could be an unnecessary expense.

Even if you’re in a relationship, life insurance might not suit you if your partner would remain financially stable without you.

But many people have dependents or want to ensure they cover the cost of their funeral. If you’re looking for those things along with the peace of mind they bring, then life insurance may be right for you.

2. Decide What You Need

If you do purchase life insurance, you need to decide how much cover you need.

You’ll have to consider whether you have dependents you need to take care of and how much they’ll need. If you don’t have dependents, you may need a lot less, such as the cost of a funeral and a smaller amount for your immediate family.

Consider your personal circumstances carefully, as this will determine the level of cover you need. The smaller your needs, the lower your premiums are likely to be. But it does mean a lower payout for your beneficiaries, so calculate carefully.

3. Select Your Type

Life insurance breaks down into two major categories: term and whole life.

Term policies cover a fixed period and only pay out if you die in the agreed policy term. Whole life policies will pay out when you die regardless of when that is.

Whole life policies provide more peace of mind, but they’re also more expensive. After all, your insurance company is almost guaranteed to pay out eventually, and that’s reflected in the premiums.

4. Consider Your Age

Life insurance evolves over your lifetime. When you’re young, premiums are low and insurance companies don’t consider you much of a risk.

For life insurance over 30, things begin to change. You’re now more likely to have existing conditions or age-related problems that could raise your premiums.

But age does come with the advantage that some insurers offer policies suited to older age groups. That allows you to purchase life insurance relatively late in life and still benefit from full coverage.

5. Shop Around

Thanks to a competitive market, it’s easy to shop around for cheap life insurance.

Shopping around ensures you can get coverage without breaking the bank. There are plenty of comparison sites online that will help you choose the ideal life insurance. They’ll compare multiple prices and policies at a time to give you a thorough overview.

Try calling some insurers up and quoting their rival’s prices. It may surprise you to see how low you can drive your premiums with a little negotiation.

6. Be Honest

When you’re shopping for life insurance, honesty is the best policy.

Failing to disclose any key facts like existing conditions could invalidate your whole policy if discovered. Insurance companies don’t make their money by paying out when they don’t have to. If any inaccuracies come to light after your death, your family could lose their claim.

Life insurance is a safer bet than other types of insurance, so don’t risk it all on a lie of omission.

7. Lower Your Premiums By Living Well

Insurance companies avoid risk wherever they can. For life insurance, that means higher premiums for risky prospects.

You can lower your premiums by staying healthy. With a few lifestyle changes, you can look forward to cheaper life insurance. Quit smoking, lose weight and resolve any treatable health conditions you have.

With the cash saved on lower premiums, you could upgrade from a term policy to a whole life one.

8. Read Everything

Yes, there’s a lot of paperwork involved in getting a life insurance policy. But you need to read it all if you want peace of mind.

Insurance companies are sticklers for the small print. You don’t want your family to lose out on your life insurance because you didn’t take an hour out to read the contract.

Your insurance company also expects all the information you provide to be correct. Reading over it will help you catch any errors that might invalidate your insurance.

9. Tell Your Next of Kin

Life insurance claims go a lot smoother when your beneficiary knows about your policy.

In the tumultuous time after your death, you want to make things easy for your loved ones. Telling them about your policy in advance means they won’t have to sift through your paperwork to find a policy you might not even have.

Make sure they know the basic details. Keep your paperwork in an accessible place and label it clearly. The easier you make it, the sooner your family can make a claim.

10. Review It

Like most forms of insurance, your life insurance policy needs an occasional review.

Aim to review your policy every few years. This gives you a chance to check your policy still applies to your life circumstances. For instance, if your income increases, you might want to pay more to up the payout.

Policy prices fluctuate, as well. The cheapest provider now might not be the cheapest in five years time. Check if you can get cheaper premiums elsewhere and consider whether switching insurer could be a worthwhile investment.

Source: toptenzilla

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