Help for First Time Life Insurance Buyers: How to Buy Term Life Insurance
When you buy term life insurance, you're
buying something that you hope you'll never have to use. But if you ever do
need to file an insurance claim, you'll understand why having the right amount
and right types of life insurance coverage is important.
Decide how much life insurance coverage you need
When you want to buy term life insurance, the
first thing you should consider is how much you need. How much life insurance
coverage you need depends on a lot of factors including how much you owe and
own, how much your assets are worth, whether you have dependents, and how much
out-of-pocket cost you could afford to bear. You can estimate your life
insurance coverage needs before you
buy term life insurance using calculators or worksheets available
on-line, but it's a good idea to work with an insurance agent who can
thoroughly evaluate your needs if you're ready to
buy term life insurance.
Comparison shop for life insurance coverage
Once you've decided what type of life insurance and how much coverage you
need, you can begin by looking at life insurance coverage online, by contacting
companies directly by phone, or through an insurance agent to obtain
information and term life insurance quotes. Get term life insurance quotes from
several different insurers because premium cost can vary widely. But compare
the life insurance coverage offered, too, before you buy term life insurance. A
policy might cost less because it offers fewer, or different, features and
benefits. And make sure the life insurance company that you're going to buy
term life insurance from is reputable, with good customer service and
claims-paying ability. All insurance companies are rated by major rating
agencies (e.g. Standard & Poor's, Moody's, A.M. Best) on their ability to
pay claims. You can access these ratings online and compare their life
insurance coverage online, as well as through public libraries, or through
insurance company literature.
Understand what you're buying before you buy term life insurance
An insurance policy is a legal contract that
may be loaded with technical terms that are hard to understand. But read it
anyway before you sign on the dotted line to find out about the life insurance
coverage you're buying. For instance, the life insurance policy will tell you:
-
Who is covered
-
What coverage exclusions and limitations apply
-
When coverage begins and end
-
How much life insurance coverage is provided
-
How much you'll pay for coverage (the premium)
-
Contact information for questions
-
How you report a loss or file a claim
Evaluate your life insurance coverage needs routinely
As your life changes, your insurance needs
change, too. So every few years review your insurance coverage to see if you
need more (or less) coverage or an additional type of coverage. Here are some
times in your life when you'll definitely want to re-evaluate your insurance
needs and perhaps buy term life insurance:
-
You're getting married or divorced
-
You're starting a family
-
You're buying a house or a car, or making a major purchase
-
Your child is going off to college
-
You're starting a new job or becoming self-employed
-
You're buying or selling a business
-
Your income increases or decreases substantially
-
You're taking care of an aging parent
-
You're retiring
Make your life insurance policies work for you
by taking the time to periodically review your needs and adjust your life
insurance coverage accordingly.
Please note that this description/explanation
is intended only as a guideline to help you
buy term life insurance coverage appropriately and to meet your needs.
|
