Top 3 Questions to Ask Before Buying Life Insurance

Are you in the market for a life insurance policy?

You’ve made a smart decision. Life insurance is one of life’s most important estate planning tools. Upon your demise, your insurance company will pay out your death benefit (a specified sum of money) to your beneficiaries.  

That being said, buying life insurance isn’t something to be taken lightly. You’re about to make a big financial commitment, so it’s essential to ensure you’re getting the right policy and for the right reasons.

To help you make the right choice, we’re sharing a couple of questions you should ask during the purchase process.

1. What Are the Different Types of Life Insurance?

There are several types of life insurance, but they fall into two broad categories: term life insurance and permanent life insurance.

Term life insurance provides coverage for a period of time, say 10 or 20 years. If the policyholder dies within this period, the beneficiaries received the death benefit. If they live longer than the term, the policy expires.

Permanent life insurance covers the policyholder’s entire lifetime, as long as the premiums are paid. There are different variations of this policy, including whole life insurance, universal life insurance, and variable life insurance.

These policies have unique benefits and downsides, and they’re suited to different needs. As such, asking about the different types of life insurance available to you will put you in a better position to settle on the most suitable one for your needs.

2. Do I Need Life Insurance If I Already Have Another One Through My Job?

Some employers offer group life insurance as part of employees’ compensation and benefits. If you’re lucky enough to have a job with such a benefit, you might be wondering if you still need to purchase another policy individually.

Well, a lot depends on the nature of the job.

If it’s a permanent job where you’re assured of your benefits after retirement or if you die during your employment, you might not need another policy – unless you don’t deem the death benefit amount sufficient. In this case, you’re justified to supplement it with another policy.

If your job isn’t permanent, it could mean you’re only insured as long as you’re in employment. If you resign or lose the job, you’ll lose the benefits that came with it. In this situation, it’s essential to insure your life privately.

3. How Much Does Life Insurance Cost?

The cost of life insurance isn’t fixed. Your premiums will depend on a range of variables, including the policy type, the amount of life insurance you need, your age and health status, and even the insurance company.

It’s important to do the math and establish how much you can afford to pay in monthly or annual premiums. This will then inform the amount of life insurance you can buy.

It’s also key to shop around and compare life insurance quotes. Insurers like Caley Insurance offer flexible payment options, so that’s something else you’d want to consider before signing any papers.

Buying Life Insurance Is a Big Decision

Death is a certainty for everyone. If you have people who depend on you financially, buying life insurance helps you provide for them even after you’re gone. Asking these questions during the purchase process will lead you to the best policy for your needs.

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