Things You Need to Consider Before You Purchase Life Insurance
Life insurance is one of the most important investments you make in your life. How could it not? This type of insurance will protect your loved ones that you leave behind. It will also become a useful tool even before that. Since it is an important investment, it will be wise if you consider things below.
The Coverage Period
First and foremost, the coverage period. You need to decide how long the coverage will be. There are two types of life insurance based on their period. The first is called term life. This type of insurance covers a certain time period. The second type is called lifetime insurance. Unlike term life, this insurance lasts as long as you live.
Which one should you choose, then? That depends on your objective. Let’s say your objective is to cover a specific time period like when your children are growing up, your best option is term life. Likewise, if your objective is to cover things such as income replacement for your loved ones after you die, your best option is lifetime.
Next is affordability. The affordability of insurance is important both in the present but also in the future. Why? Because in general, one of the first things people drop when their life gets tough is life insurance. When you let your insurance policy lapse, it will be either very costly to reinstate or impossible in case your health changed.
By purchasing insurance with affordable premium, you will more likely to keep your policy in long term. In case life gets tough, you will have better chance to hold onto your policy even if you have to make a serious cut in your expenses. So, be sure that you purchase insurance that you can pay long-term.
There are lots of policies that offer the option to receive payments for the insured individual in case they get a chronic illness. Some insurance companies also give a 20 or 25-year windows for the insured individual at which point they can get some or all of the premiums they have paid.
A good insurance policy should have a conversion feature. That means you will be able to convert your term life policy into a lifetime policy after you purchased it. This feature is very beneficial if your health changes and developed some medical conditions since the initial policy purchase. With this feature, you will be allowed to keep your coverage intact.
There are bills you want to pay manually and there are other bills that you want to pay automatically. Insurance is one of the bills that you want to pay automatically. The reason is that your policy will be canceled if you failed to pay it on time, something which may happen for various reasons.
When you are late in paying your premium, your insurer may prohibit you from paying the premium you missed. Not only that, they are also not obliged to reinstate your insurance policy as well. So, to make things simpler, choose insurance that have automatic payments, especially if the premium of the insurance stays the same.