With so many options to choose from, the process of shopping for life insurance can be both hectic and confusing. According to a study by LIMRA and Life Happens, consumer confusion around life insurance is among the main reason why some Americans don’t carry this coverage. However, the COVID-19 pandemic has given many Americans a wake-up call. According to a study conducted by Insurance Barometer in 2021, 30% of Americans are now more likely to purchase a policy due to the pandemic. Here is what to expect when shopping for a life insurance policy.
How an Agent Can Help
The job of an insurance agent is to assess your insurance needs and help you find a policy that’s ideal for you. Your agent will conduct a comprehensive analysis of you and your family’s needs and then help you determine the kind of insurance policy that suits you.
Calculate How Much Life Insurance You Need
You should consider two important aspects:
- What financial resources will your dependents have if you pass on?
To determine this, you should consider three kinds of resources:
- Retirement related benefits like social security
- Group life insurance
- Other resources and assets
- The financial needs that your dependents will have after your death:
These include:
- Final expenses
- Debts
- Income needs
You should then subtract the available financial resources from your survivors’ financial needs to determine the amount of life insurance you should purchase.
Consider Other Objects You May Have
Some variants of life insurance have a savings component, in addition to covering death benefits.
Determine the Type of Insurance that Best Suits You
Basically, there are three variants of life insurance: term life, universal, and whole.
- If you need coverage for only a particular period, or if your budget is limited, you should consider a term policy, which attracts lower premiums.
- Conversely, if you need insurance for your whole life and want to accrue savings, you should consider either a universal or whole policy.
Find out If You Need to Include Any Riders to Your Policy
There are two riders that you should consider, guaranteed insurability and waiver of premium.
Some policies include either one or both riders. If not, you should consider adding them. Guaranteed insurability enables you to keep adding to your death benefit, without being required to provide additional proof that your health is satisfactory.
Shop Around
Life insurance rates vary from insurer to insurer. Therefore, before settling on a given policy, you should shop around and compare quotes.
Consider Longevity and Financial Strength of Your Insurer
If you’re comparing various insurance companies that offer similar rates, you should consider their longevity, financial strength, and reputation. You should ask yourself, “Will the insurance company be in operation for as long as I’m alive?” Your insurer should be financially robust enough to keep their promise 40 to 50 years later.
Your insurance agent will help you assess your insurance needs based on your confidential conversation with them on your income, assets, and debts (like your mortgage). They’ll also ask about your beneficiaries (those who are to benefit from the policy), your hobbies, health, and issues that may affect your eligibility. Therefore, you should have this information plus any of your initial questions or thoughts handy.
How to Get the Right Life Insurance Policy
Reach out to us at Donald Weiss Insurance Services for a life insurance policy that suits your needs and budget. Contact us today to get started on your personalized coverage.