Life insurance is not a subject many are eager to discuss, but it’s an important option to consider if you are concerned about the welfare of your family. Before you purchase any life insurance policy, take the time to educate yourself about what life insurance options are available. Too many people make serious mistakes when it comes to purchasing life insurance. However, with a better understanding, you’ll be able to make a more informed decision.
1. Deciding You Don’t Need Life Insurance
A good test to determine whether you need life insurance is to ask yourself this: If you were to die tomorrow, would your family be financially secure for the rest of their lives? If the answer is no, then you should consider life insurance.
Most families today have credit card debt, medical bills or student loans, not to mention a mortgage. A life insurance settlement will ensure that all these debts are covered in the event of an unfortunate incident.
2. Choosing the Wrong Type of Insurance
Purchasing life insurance when you are younger saves you plenty of cash over the years because your monthly premiums will typically be lower depending upon which type of insurance you choose. You’ll also be able to choose insurance more suited for your needs and budget. For example, instead of purchasing whole life insurance, which you pay for over the course of your life, you might opt for term insurance, which is insurance that you pay for over a specific number of years. The idea is that this will protect your family while the children are growing, but the insurance expires by the time they’re grown.
3. Choosing the Wrong Amount of Coverage
When you are considering life insurance, you need to calculate how much income your family might need. Many people just simply make this choice based on what seems like a good amount, or on how much the monthly premiums might be. Work with a financial professional to more accurately determine the correct amount so you don’t end up over- or under-insured.
Remember, the purpose of life insurance is to ensure that your family has the financial stability they need for the remainder of their lives if you die unexpectedly. Life Insurancemay not seem like a fun subject to discuss at first, but you’ll enjoy greater peace of mind once you have it.
Unsure what type of life insurance to purchase? Term life insurance is the most popular plan, only paying out if death occurs during the said policy. Need more options? Liberty Mutual offers a number of plans to suit each family.