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Choosing a Life Insurance Plan Tips
LifeInsure.com Tip: Comparing Life Insurance Options
Even if the first plan you learn about sounds like a great deal it is still a good idea to compare life insurance. Life insurance has evolved significantly in the last 15 years. Shoppers should explore a variety of options and plans before making a decision. How can you get the most current information and avoid “buyer’s remorse?” The following tips offer some clues.
Tip 1. Talk with a Life Insurance Agent
• A good life insurance agent might have the most up to date information on options for policy holders. Talk with a life insurance agent about why you want insurance and your goals in buying a policy. Your agent can use that information to steer you toward products that are best suited for your needs. • Your life insurance agent can also simplify some of the more complex terms and intricacies built into many of today’s life insurance policies.
Tip 2. Compare Life Insurance Online
• Comparing life insurance online can eliminate the need to discuss life insurance with an agent. Internet research introduces potential policy holders to important concepts and considerations when purchasing life insurance and the ability to compare life insurance rates on your computer.
Tip 3. Learn from Satisfied (as well as dissatisfied) Life Insurance Policy Holders
• Testimonials or personal conversation with those currently using the online internet service or agent you are considering can help purchase life insurance without later regrets.
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Tips on the Benefits of Life Insurance Agents
There are so many questions that come up when considering life insurance. How much life insurance does one need? What is the best life insurance? What is the best way to make an accurate life insurance comparison? For the answers to these questions and others, why not go right to the source – your life insurance agent.
Tip 1. A Life Insurance Agent is Your Link to Valuable Information
Even if you do most of your information gathering on the Internet or by collecting brochures, your insurance agent is still a valuable component of the insurance buying process.
Why?
Using experience and complex knowledge of insurance products your agent can help you project and avoid unanticipated outcomes.
Life insurance agents have in depth knowledge about available products. Just like with mortgages, even if you understand the process well, nuances may escape you. That is less likely to happen with a life insurance agent.
Your life insurance agent can help you include considerations you may overlook.
Experience helps the life insurance understand any differences between how the product looks on paper and, ultimately, how it performs. That experience is an important benefit for policy holders.
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LifeInsure.com Tip: Tips for Determining How Much Life Insurance You Will Need
How much life insurance do you need? There are no hard and fast rules or answers. The number depends on your individual circumstances, life stage and goals in obtaining insurance. The following tips can help you arrive at a ballpark figure.
Tip 1. Use a Life Insurance Calculator
• A life insurance calculator is a fairly accurate way of conducting a capital needs analysis (in other words, determining how much money or capital you will need). • To determine your amount, plug in estimated figures for funeral costs, estate taxes, mortgage and other debts. You will also plug in anticipated income from social security or other sources, assets and the number of years the income from the policy will need to last. These numbers taken together should give you an idea of how much life insurance you will need.
Tip 2. Use a Formula
• The simplest formula multiplies the annual income of the policy holder by the number of years the income from the policy will need to last. For example, if the policy holder earns $30,000 annually and wants to provide 20 years of income for beneficiaries the face value of the policy should equal $600,000 (or twenty times the policy holders salary) • More complex formulas consider a variety of factors to arrive at more accurate figures.
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Tips on Considering Life Insurance for the Whole Family
Life insurance isn’t just for those employed outside the home. Use the following tips to determine if a life insurance policy is appropriate for family members that do not earn wages.
Tip 1. Life insurance is an Important Investment for the Whole Family
Most of the concern with life insurance is replacing the income of the policy holder. Life insurance can be an important financial decision for family members that do not earn income, too. For example:
Stay at home moms may not earn income, but family members should be mindful that someone will have to assume those duties in mom’s absence. Chances are that the family may have to employ someone to care for the children and manage all the responsibilities of the household.
When calculating how much life insurance is needed, policy holders should calculate the annual value of all the work performed. That figure should be multiplied by the number of years mom would have been at home with the children to arrive at the policy amount. Some policy holders may want to include final expenses in the life insurance plan.
Tip 2. Life Insurance Can Be an Estate Builder for Children
It can be especially difficult to consider life insurance for a child. Hesitant parents should be aware that certain types of life insurance can be an investment in a child’s future. In these cases, parents should focus their life insurance purchase on creating options for the child’s future rather than the worst case scenario.
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LifeInsure.com Tip: Tips for Choosing a Life Insurance Agent
In many cases, the life insurance agent can be almost as important as the life insurance policy. Wondering what to look for when choosing a life insurance agent? Read the following tips for a few ideas.
Tip 1. Consider an Independent Agent
• Independent life insurance agents can be more focused on consumers because they are not focused only on one company. • Independent agents can share information from multiple carriers, which means more diverse options for potential policy holders. • Independent agents work with multiple carriers so you can continue your relationship even if you choose to go with a different carrier.
Tip 2. Be Sure Your Life Insurance Agent is Knowledgeable
• The decision to buy life insurance is not one to be taken lightly. There are many considerations. Insurance shoppers should expect that agents will be knowledgeable enough to provide expertise across a range of scenarios. • Life Insurance agents should participate in ongoing training and professional development activities that keep the knowledge base current and relevant. Ask your agent about training, licensing and experience.
Tip 3. Choose a Life Insurance Agent that is Accessible
• Whether it is via telephone or email, your agent should provide reasonably prompt responses to questions and inquiries.
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Tips on Life Insurance Options
New options and products mean it is wise to compare life insurance plans. Even among the more common types of life insurance – term, whole and universal – there is wide variation. Use the tips below to help you narrow the field and focus on the best life insurance for your family.
Tip 1. Term Life Insurance Insures Against the Possibility of Death
This type of plan may not cover the entire life of the policy holder. Term life insurance can cover periods as short as one year or as long as 30 years. If the policy holder dies during the term, beneficiaries receive the face amount of the policy.
Standard term life insurance is the least expensive and most straightforward option among insurance products.
Tip 2. Whole Life Insurance Provides Life Long Insurance Coverage
This type of plan is designed to cover the policy holder over the entire course of life. The policy builds cash value and pays a death benefit as long as premium payments remain current.
Tip 3. Universal Life Insurance May Also Provide Lifetime Protection
Like whole life insurance, universal life insurance is a permanent insurance policy. Unlike whole life insurance, universal life insurance does not offer the security of guaranteed lifetime protection. Policy holders interested in this option can talk with a life insurance agent and add riders that create a universal life policy that meets their particular needs.
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LifeInsure.com Tip: Tips on When To Review Your Insurance Needs
Your life insurance needs can change at different stages of life. There are several times in your life when you will need to consider how much life insurance you need. The following tips highlight some of the more common life stages that warrant a review of your policy.
Tip: Consider How Much Insurance You Need When…
• You are shopping for a policy. It is important to identify your financial goals when buying a policy. Use these goals and a life insurance calculator to be sure you are opting for adequate coverage.
• You marry. Your needs and goals are likely to change when you begin building a life with a spouse. Talk together about those needs and goals when deciding what changes should be made to any current policies. Have current policies on hand when you talk with your life insurance agent.
• You become a parent. Children add another layer of financial concern that must be addressed in your life insurance policy. When deciding how much life insurance you need try to anticipate your child’s needs. You will likely want to have enough coverage to meet your child’s needs (such as educational expenses, housing, etc.) until you anticipate they will achieve financial independence.
• You divorce. Here again your concerns, and in some cases obligations, can shift. Review your policy at this time and make changes that reflect those shifts.
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LifeInsure.com Tip: Tips for Choosing the Best Life Insurance
What is the best life insurance? It depends on who you are, what you want and what you need. There are several tools you can use to help you weigh the pros and cons of life insurance plans. The tips below highlight the most commonly used among these.
Tip 1. Use a Life Insurance Premium Calculator
• Let’s face it, a life insurance policy is of no use if the policy holder is unable to make the payments and loses coverage. A life insurance premium calculator can help you figure out what plans will most successfully fit into your budget, and plan accordingly. You can find these online.
Tip 2. Compare Life Insurance
• Get as much information as you can about what is available. Experiment with different coverage levels and options. The best life insurance is the one that most closely fills the needs you identified when seeking coverage. Conducting a life insurance comparison can help you learn more and pay less.
Tip 3. Ask a Life Insurance Agent
• Particularly if you are working with an independent agent you can learn about diverse products from multiple carriers. When more options are available to you your chances of finding the best life insurance are increased.
