Making The Decision To Buy Life Insurance

Everywhere you look today, you’ll find advertisements wanting you to buy life insurance. From the billboard on your way to work, to those annoying telemarketing calls, it seems as if there is no end to the places where you can buy life insurance in the USA.

Whether you’ve just turned 28 or if you’re over 80, you have so many options in the way of life insurance that even investment specialists and financial planners can get confused. So how does one approach the problem?

It’s best to begin at the beginning.

Before you buy life insurance:

1) The first question you must ask yourself before you make this important investment is this: Should I buy life insurance? Here are a few reasons to consider.

• If you have a spouse or significant other who depends upon your income, you should buy life insurance.

• If you have dependent children or an elderly mother who depend upon you for all or much of their care, you should buy life insurance.

• If you have a mortgage, own a business, own vacation or rental properties, you should buy life insurance.

In short, if you die tomorrow and there will be no loss of income or quality of life to anybody who depends upon you after you’re gone, you might get away without investing in life insurance. Otherwise, a plan which includes life insurance is of critical importance.

2) Your second question is this: What type of life insurance is best for me? There are three main kinds of life insurance policies sold in the United States today. They are:

• Term Life – this is a policy which many parents with children find to be the best place to begin. Term Life Insurance covers you in case of an early or unexpected death. The policy is purchased for a certain term – up to 30 years – and the premiums are fixed so they won’t go up. The shorter span of the term policy is designed to protect surviving parents and dependent children while they are young.

• Whole Life – this is a policy which does two things. First of all, it will pay a death benefit when you die and, because the cash value of the policy grows over time, it can be a good savings or investment tool. You may borrow money on a policy like this to pay off college loans or pay for a vacation with the wife and kids. These policies are more expensive than term policies and they remain in effect until your death even if you’re over 90 when that time comes.

• Universal Life – these policies are the most flexible of the options. Universal life policies have two components – the life insurance and the investment components. The cash value vested in one of these components may be shifted to the other so that, if your savings portion isn’t earning interest at a rate you find satisfactory, you may use that savings to pay your monthly variable premiums instead of spending out-of-pocket.

Where do I buy life insurance?

There seems to be a life insurance salesman on every corner! Online, there are more. So how do you make the decision about where and how to select your best life insurance options? Go to someone you know!

Most likely, you have had an ongoing working relationship with an insurance professional for years. The insurance agent who sells you auto and homeowners insurance coverage can also help you with decisions about why, when, where and how best to meet your financial security needs. Learning about all the life insurance products which are available on the market today can be like learning a foreign language. It helps to have a friend who is fluent in that language.

Should I buy insurance online?

Even though we urge you to meet with your trusted insurance professional, it’s still a very good idea to do some investigation on your own beforehand. Invest a few hours in exploring the online insurance world. Write down your questions and, if there is a chat feature at the site you’re visiting, don’t be afraid to ask for answers. Ask for quotes and look at reviews. Check the company’s ratings. (You can do this at one of many sites which rate the reliability of insurance companies.) Remember also that these online agents’ main job is to generate leads. Quotations cost them nothing. Convincing you to buy term life insurance or a whole life policy may be an attractive option to the salesperson, but you are under no obligation to buy. Don’t feel pressured.

Like any other important investment, getting the best rate and the best insurance policy for your needs depends upon being an educated consumer. Do your homework! A bit of studious attention to insurance details can make buying insurance online a winning solution.

It’s also important that you take the time to understand a few other factors. Even senior citizens and those whose health conditions might appear “uninsurable” can find affordable life insurance policies with no medical exam required. Smokers and diabetics over age 50 or 60 can still find insurance and some extra security by shopping around.

Your friends and neighbors can also be valuable resources as you approach life insurance decisions. They have all probably had direct experience with insurance companies. Ask them where to buy term life insurance. Ask them about their trusted agent. Listen to their stories and learn from them.

Salesperson? Broker? From whom should I buy my life insurance?

An insurance Broker is one who can generally sell insurance from a number of companies including the top 10 companies in the Nation. The salesperson probably sells for just one company. Once again, the key is to be comfortable with the integrity of the person on the other side of the desk before the agreement is signed.

Whether you live in Texas or the UK, you must evaluate your individual set of circumstances in matters of life insurance. As a well educated consumer, you will find that the decision to buy life insurance is less complicated than you originally imagined.

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