Buying life insurance for the first time can be like ordering coffee at Starbucks, which can be pretty confusing. While we may have wrestled COVID-19 to a standstill, it was a wake-up call for many of us to revisit our decision about life insurance.
Life Insurance is a reassurance that your loved ones will be financially OK in the event of your death.
The fact is that life insurance is quite an affordable means of protecting your family if the worst happens.
Getting it wrong could mean paying more for a policy that is not best for you.
To get you in the right direction, we’ve gathered what we believe are the best tips for you as a first-time buyer.
What’s Your Financial Situation
Without a clear view of your financial health, you cannot decide on the life insurance you need and its worth. Do a sum of what you currently have as retirement savings, emergency fund, and work-related life insurance policy.
Know what’s lacking and what you want to cover with your new life insurance policy.
How Much Coverage Do You Need
Often, we downplay the amount of life insurance we need. If you genuinely want to provide a safety net for your loved ones, you need to think beyond your significant debt. There’s going to be a spouse and kids to support. Don’t forget college tuition also.
Rule of thumb, let the death benefits be at least ten times your salary.
Look Beyond The Premium
While the premium might eat deep into your income, you need to remember that it’s for the greater good. Of course, the premium should fit into your budget. However, you need to know that it’s not all about the premium.
Put your loved ones first before the premiums. Have a realistic budget for the extra expense.
What’s The Best Life Insurance Policy For You
Once you have a grip of the level of coverage you need, the next is to decide on the right life insurance policy for you. You are caught between term life and whole life policies.
Go with term life if you need a larger death benefit protection on a budget. Consider getting a permanent product life whole universal life for long term needs.
Talk To An Expert
As a first time, life insurance is a major financial decision that would be easier with a conversation.