If you are buying life insurance for the first time, you may feel overwhelmed. This is an important purchase that protects your dependents. If you get it wrong, you won’t be around to fix it. The good news is that buying life insurance online gives you the opportunity to do a lot of research and comparison. The tips below can help you make the right purchase.
Consider Your Finances
Life insurance is all about making sure your loved ones are cared for if you are no longer around to support them financially, so your first step should be an overview of your finances. You should look at such things as whether you already have an emergency fund in place and what their needs will be in the years ahead. Do you want to make sure there is enough money for your child’s college or other education costs?
Make sure that you purchase a sufficient amount of coverage to give your family the protection that they need. Another element you might want to consider is whether you want the option of eventually selling your policy. Once your children are grown and you are headed toward retirement, the money from a life settlement can add substantially to what you already have saved. You can review a guide about this to help you decide if you want a policy that makes this possible.
Understand Insurance Types
You should also do some research on the different types of insurance so that you know which one is right for you. There are two broad categories, term and whole life. Term life insurance is good for a certain amount of time, such as 10, 15 or 20 years. Whole life is just what it sounds like–it lasts for a lifetime unless you sell your policy or let it lapse. However, under these umbrellas there are other options as well. Some types of policy are better if you want to treat your insurance like an investment. There are further differences in these types of policies regarding what type of investments the policy’s value is tied to.
Look at Rates and Reputation
It is important to take a look at how much premium you should pay and make sure that you can afford it. You may want to try getting a few quotes online so you have a good idea of the range of prices you’re looking at. However, there are other factors you should consider as well. One of the most important is the company’s ratings. You are counting on this company being around for decades, so you should look in a guide to make sure the company has an A rating.
Another aspect you may want to consider is the application process. This is likely to be extensive, and companies may verify the information that you provide them with. In most cases, you will be required to undergo a medical exam as well. Some companies offer options that eliminate this requirement, but you may pay higher premiums.