While you can get a life insurance quote online in a matter of minutes, it can be difficult to determine immediately whether the lowest priced option is the best fit. This is because life insurance comes in myriad forms and at many prices. Ask these questions when doing a policy search to narrow down the options and find out what’s right for you and your family.
How much income would need to be converted?
Your living situation and age play an important role in determining how much coverage you need from the policy. Joe Taylor, owner and founder of Oak Street Advisors in Myrtle Beach, said, “Life insurance is a great tool to protect heirs who depend on the income stream from a family’s earner, or stay-at-home parent. of economic value to change.” , South Carolina, told The Epoch Times. As such, you will want to determine how much income will be needed to support a loved one who is financially dependent on you in your absence.
“For a young couple with children, we will often add the cost of financing any higher education plus a mortgage payment amount so that there are no worries about the expenses off the table,” Taylor said. “We will deduct any investments or retirement savings from this amount, as those assets can be used to provide some income loss offset.” If your children are grown and self-supporting, you may need a different level of income to provide leave for a spouse or other family members.
What types of policies are available?
“Term insurance is designed for young families,” national independent life insurance agent Lisamarie Monaco told The Epoch Times. If you have a growing family, a home mortgage and other loans, you can opt for this type of policy. It will last for a chosen time period, such as 10, 15, 20, or 30 years. You will usually need to undergo a medical examination for the policy, which will then determine factors such as the cost of premiums. When the policy expires, you will have to either buy a new policy or renew the one you have.
Another option is known as whole life, or permanent, insurance. This policy will last for the rest of your life, as long as you continue to pay premiums. It also includes a cash value, in which part of your premium is kept in the investment. Earnings can grow over time, and you won’t pay taxes on the gains. You may be able to borrow from this cash value or use it to pay your premiums; You can eventually withdraw it as cash as well.
You may also learn about a type called final expense or burial insurance. “The age limit for this type of policy is 50 to 89 years of age,” Monaco said. It can be purchased to cover funeral expenses, pay off some debt, or leave an amount for children or grandchildren. This type of policy does not require a medical examination, but will include health-related questions on application.
How much will the insurance cost?
Different types of policies carry different prices depending on factors such as the amount of coverage, the length of the policy, and your health condition. If you buy a term life insurance policy, you will generally find two types available: Guaranteed Level Term Life Insurance and Renewable Annual Policy. With guaranteed level term life insurance, the premium remains the same for the term of the policy. A renewable annual policy will need to be renewed, and the premium is increased at each renewal.
With a whole life insurance policy, the premium remains the same throughout the term of the policy. Since the policy lasts for your lifetime, the premiums are much higher as compared to term life insurance.
Does the policy have first day coverage?
Some policies cover a longer period of time that must be in place before the full death benefit is available. If you choose a life insurance policy with a waiting period of two years, your beneficiary will not receive the full death benefit if you die during the first two years. “Instead you’ll just get a ‘return of your premium’ and a small interest payment, which is usually 10 percent,” Randy Vandervet, president and owner of Funeral Funds of America, told The Epoch Times.
If the policy states that it has coverage on the first day, the waiting period is not covered until the benefit goes into effect. “The first-day coverage plan will pay your beneficiary 100 percent of the death benefit from day one,” VanderWait said.
Are discounts available?
You can generally expect to pay more for coverage if you are in poor health or smoke. On the other hand, if you are in good health and do not smoke, you may be eligible for some price reductions. “Ask your agent if there is an exemption for not smoking, having a healthy height to weight ratio, being healthy in the past 24 months, or for not being on certain medications,” Vandervet said. “These discounts can save you a large sum of money over the life of your policy.”
This News Originally From – The Epoch Times