Life doesn’t always go as planned. Sometimes unexpected things happen, and people depart suddenly. Getting life insurance is a good way for people to support their loved ones who are left behind after they pass. It may not be a pleasant topic to think about, but it is a necessary one. Even if you have life insurance through work, it may be beneficial to get life insurance on your own. After all, you only have life insurance with your employer if you stay employed with that employer. Or the work-provided life insurance might just not be enough for you. The life insurance market may seem daunting, but it doesn’t need to be. This article will tell you how to get the best deal on life insurance every step of the way.
- Determine the amount of life insurance you need
The life insurance amount you get should be enough to financially provide for all your children along with other dependents when combined with your assets. Let’s look at John’s situation. John is a 32-year old married man with a 3-year old son who earns 50,000 euros a year before taxes. His wife also works but they rely on both incomes to keep the family afloat. John has 60,000 euros in a combination of savings and investment. In this instance, a reasonable policy for John would be 525,000 euro life insurance policy. This would replace John’s after-tax income until his son turns 18. If John wanted to account for inflation, his son’s college education costs, and future earnings potential, he may want to get a higher policy.
I would recommend using a life insurance calculator to help figure out how much life insurance you should buy based off a whole host of factors, such as income and age.
2. If possible, buy when you are young and healthy
If you buy life insurance when you are younger and healthy, the policy will be less expensive than what it you weren’t. Buying life insurance when you are young and healthy could help you save substantial sums of money in the long run. If you wait until you are sick or develop a medical condition, buying a life insurance policy becomes more expensive, if not impossible to obtain.
3. Know how long you want the life insurance policy to be
Your current living situation determines how long you should get a life insurance policy for. Typically, you want to get a life insurance policy that stays in place until your dependents on financially independent or until you are able to save enough money to provide for them. If you want to cover your child’s college fund, it’s probably a good idea to make sure the life insurance policy is active during their college experience.
4. Check your insurance carrier’s ratings
A.M. Best is an insurance rating company that rates insurance companies based off of their financial strengths. When you get life insurance, going the cheap route isn’t always the smartest option. Sometimes getting a little more expensive option allows for clients to get a lot more benefits in their life insurance packages. Please make sure you are choosing a policy from an insurance company that is rated at least A+ or better by A.M. Best.
5. Understand how insurance companies price life insurance
Different life insurance companies put different weights on factors. These weighted factors are what determines how much people pay for a life insurance policy. To compare quotes between companies accurately, it’s best to make sure every company has a completed application. Working with an experienced and knowledgeable insurance agent will help you find the right insurance carrier for your needs.
This article was written by Ian, an intern at Irish Mortgage Brokers and Yes.ie from the USA.