Life insurance is a complicated subject. When it comes to making your first purchase of a life insurance policy, chances are you won’t quite know what you are doing. A million questions are likely to go through your mind, from why am I doing this, to how much do I really need?
Often, the first-time policy buyer is young, healthy, and not at all thinking about the actual need for life insurance. The conversation may develop as your learn about your employer group sponsored policy, or perhaps in reflection of seeing someone else make a purchase or being in the unfortunate position of hearing about the death of someone you know – who didn’t have life insurance and the family left behind is in need. Just like buying a house with homeowner insurance, or a car with auto insurance, or any other insurance policy, life insurance is complex and different for everyone – but – the one thing in common? Insurance fills a need.
Why Life Insurance?
The bottom line is that owning a strong life insurance policy early on is a smart choice financially. Life Insurance is something that people can fall back on when in financial need, becoming something that is of huge assistance. Life insurance policies by design provide financial support and security to families in need following the loss of a loved one, but they can actually do much more than that, offering a sense of security and peace of mind during times of injury or job loss. It all depends on the type of policy that you get – thus the potential complexity.
Here are a few quick tips for the first time policy buyer:
- Understand why you need life insurance. Think about your family, your finances, your career and future financial prospects, and understand exactly what the policy can do for you.
- Estimate the financial amount that you need from your policy. Don’t make the mistake of getting a policy that won’t cover the expenses you are most concerned about.
- There is more than one type of life insurance policy, and it is important that you research all of your options before settling on one. While a term life insurance policy is likely to provide affordable monthly payments, a permanent life insurance policy is typically more comprehensive and will actually possess cash value. Know what is best for your personal needs before making a choice.
If you have never purchased life insurance before, now is a great time to start looking. And to ensure that you are looking at what YOU need – reach out to an insurance representative for both education and selection.