Everything First-Time Buyers Need To Know About Life Insurance

The more you know and understand about life insurance basics, the better you’ll be able to decide what’s right for you. Some folks will find it better to speak to a financial expert while others may find their questions answered by doing their own research.

Here’s a basic overview that’ll help you get started:

If You Have Dependents, You Need to Purchase Life Insurance

The primary purpose of buying life insurance is for it to serve as income protection. If you have loved ones who depend on you financially, buying life insurance is not optional, it’s a smart financial move.

In the unfortunate event of your death, the payout from your policy will help cover everyday bills, mortgage payments, etc.

Evaluating the Amount of Life Insurance You Need Is Not Very Difficult

A coverage amount that is at least equal to ten years of your income is what experts recommend.

At the very least, opt for a coverage amount that equals any outstanding debt (mortgage, auto, and student loan) plus five years of your annual salary.

Life Insurance Is More Affordable when You’re Young and Healthy

Buying life insurance when you get older is a lot more expensive. So don’t put it off for later. Young and healthy people may get term coverage from reputable insurers for a surprisingly low price.

Know how Much Life Insurance You Get Through Your Employer

If the amount of coverage provided by your company is not adequate for your unique needs, consider buying additional life insurance. You can do this either through benefits plans at work or on your own.

Your Life Insurance Needs Will Evolve Over Time

Changes like a new member in the family, a new job, or moving into a new home may impact your life insurance needs. Make sure to reevaluate your life insurance periodically – either during your benefits enrollment period (at work) or when you receive your Social Security statement in the post – to see if you need more coverage.

Term Life Insurance Is an Easy and Cost-Effective Way to Get Short-Term Protection

Term life insurance runs out at the end of the term, so it can be used to protect needs that you can anticipate, including paying off a mortgage or paying for a college education.

Whole life insurance can also help you meet several important financial goals:

– You have an additional source of retirement income: You can borrow against or make withdrawals from the accumulated cash value

– You protect your income-building equity

– You leave behind a financial legacy for your dependents

It’s Important to Check the Financial Strength and Reputation of The Company You Buy From

This is a key consideration to ensure guarantees are kept. Make sure to ask around, do some research and read reviews before you buy.