When’s the best time to start thinking about purchasing life insurance?
When you get married? Or when you have a child? Maybe once you’re 30…?
If you loved ones are financially relying on you, it might be time to start looking for an insurance policy. When it comes to protecting your family, the sooner you buy a life insurance, the better.
I’m here to show you the smart way to buy your life insurance and share with you some important tips to help you understand how life insurance works and how to choose the one that fits your particular situation.
Do you really need life insurance?
Let’s address the big elephant in the room: Do you really need life insurance?
You’re the only one who can decide that.
There’s no right or wrong answer to this question. I’m not here to tell you, “hurry up and buy a life insurance or you’re going to be in big trouble.” That’s not how it works.
However, I want to prompt you to make a decision based on a careful assessment of your financial situation.
Here are a few questions that can help you decide whether you need a life insurance or not:
- Do you have family members (spouse, children) relying on your financial contribution? Are you the primary breadwinner?
- Do you have a mortgage or educational tuition to cover in the next 5 to 10 years?
- How substantial are your assets? Can they cover all your monthly expenses in the unfortunate event that something might happen to you?
When you consider the above questions, you soon start to see that there are a few good reasons to get a life insurance:
- to cover the funeral and other final expenses
- to replace lost income
- to pay off your mortgage
Tip: Life insurance might be a great option for you if you don’t have enough capital to allow your family or business to pay their monthly bills in case of your absence.
[ctt template=”7″ link=”0bfa1″ via=”no” ]Life insurance can help your family, in case of your absence, get enough capital for their monthly bills. [/ctt]
Think about your financial situation and try to decide if you and your family need life insurance. Don’t spend too much time on it, though: life insurance is far cheaper when you’re young and healthy.
How to buy the right life insurance for you
No matter what your insurance broker tells you, life insurance isn’t an investment but a form of risk management.
With that in mind, the right life insurance for you should include the least amount of coverage for the lowest price and the shortest time period necessary to cover for your risks.
The principle is simple: the less you spend on your insurance, the more you can invest towards building your financial freedom.
Usually, insurance agents will suggest that the right life insurance for you should replace 3.5 times your annual income plus your monthly debts.
The best way to find the right life insurance policy for your specific needs is to look for an independent insurance agent that can help you figure out a suitable policy for you. They are the best person to decide which insurance company will approve you at the best rating class.
Tips to consider before applying for a specific life insurance
- Do online research of all the available life insurance policies that might work for you and their rates. It’s always best to be thoroughly informed before you meet with your insurance agent. This will help you ask the right questions and make an informed decision about your life policy.
- Understand the small print in advance by contacting an expert to advise and help you figure out both your rights and responsibilities included in your insurance policy contract.
- Captive vs independent insurance agents. Choose independent agents as they represent various insurance companies, as opposed to captive agents who represent a specific insurance company.
- Be prepared to answer a lot of personal questions like gender, age, weight, height, family history and unhealthy habits. For example, if you’re a smoker you’ll have a higher rate.
I hope all this information has shed some light onto the serious topic of life insurance. Start your assessment now and work with your insurance agent in finding the type of policy that best suits your financial situation.
I can assist you with any questions or concerns you may have regarding your life insurance. Let’s get in touch now.