When the worst happens, the value of life insurance for people and business owners becomes abundantly evident.
So, here are 5 questions that you should ask yourself before buying life insurance to protect your family or business.
What types of coverage are available?
There are two types of term insurance policies: individual and group.
Group insurance covers an entire group of people, with the policy owner usually an employer or an entity. The policy covers the employees and group members. It features income tax-free death benefit so can be extremely beneficial. This might also be referred to as business life insurance.
Individual coverage is an individually paid, single-coverage policy designed to address the financial needs of the family of the insured person, should they pass away.
Why do I want life insurance?
Consider why you’re buying life insurance before you go out and buy it. It could be for a variety of reasons, including protecting your family or business in the event of an early death, or leaving an inheritance or a charitable donation.
Permanent life insurance is a good option if you want insurance to cover any debt you will have for a long time. Term insurance is a great short term solution if you’re in a tight financial situation and have imminent obligations to your family or business partners.
What happens if I don’t die?
It is essential that you look into and know what exactly will occur to your coverage and policy when the term of your life insurance approaches its end.
If you buy term life insurance and don’t die within the set time period, you don’t get anything back, leaving many people wary of whether to buy this type of life insurance.
You might be able to keep your policy coverage as it approaches the end of its term. However, you could receive a significant increase in your premium if you’ve been paying level premiums during the term of the policy in order to do so.
How much cover should I buy?
Deciding how much coverage to buy is a very personal decision. Your decision might be influenced by a number of circumstances, for example, how dependent your family or business are on your income.
When deciding how much life insurance cover you should buy, you need to consider your future needs. You need to identify your annual income and expenditure, and to recognize the total amount of money required to support your family or business without you and your earnings present. Taking this amount and increasing it slightly should cover any unforeseen circumstances and extra expenses you may also have.
Which insurance company do I choose to buy coverage?
Pricing is crucial, but it should never be the sole deciding factor. You should compare costs, but you must also compare insurers on other criteria as an informed consumer so that you get the right insurance for you.
You should also look at customer service reviews, and collect information from them, to understand how they operate.
By asking yourself these 5 questions before buying life insurance, you will ensure that your family and business are protected by your coverage.