Compare life insurance policies to find the best coverage for you and your family.
Like anyone else, you want a life insurance policy that meets your needs and budget. However, a simple search on the web can bring up thousands of results of policies, all seeming so familiar – so where do you start? The key is to know how to compare policies and evaluate the results.
Know What You Need
When purchasing life insurance, the questions isn’t really how much you need, but how much capital your family will need at the time of your death. This depends on two variables:
- How much will be needed at death to meet immediate obligations? (e.g. uncovered medical bills, funeral costs, outstanding debts, mortgage balance, etc.)
- How much future income is needed to sustain the household? (e.g. the total “present value” of cash-flow streams your family will need after your death)
Know What You Want
There are different types of life insurance policies to be aware:
Term – This provides life insurance protection for a specific length of time at a fixed rate.
Whole – It is not defined by a specific term length but it pays a guaranteed benefit to your beneficiaries when you die, and generally accrues a cash value over time through interest.
Universal – This is referred to as a flexible premium or adjustable life insurance. This is not limited to a set term.
Once you’ve established what insurance policy that you want, it’s time to search!
Check the Coverage
While you may be tempted to go with the cheapest policy, be aware that it may not provide enough coverage for your family. Do you really want to put them in a financial bind – even after you’ve passed? Talk to a professional insurance expert to find out what life policy is best for you!