Many people have become conscious about their health, and with the pandemic still not resolved, it’s natural to want to take any additional measures you can to protect your loved ones in the event of the worst-case scenario. Providing financial relief if you die is just one reason to seek out coverage, though. Life insurance can also provide you with a cash value that you can borrow against or sell to use in its entirety later on. This could be used for anything like financing a move, paying for your child’s college tuition or even paying off your own student debt. With so many options online, it can be tricky deciding which insurer offers the best package and greatest benefit for your budget. This checklist will ensure you cover all the most important bases before settling on the right policy for you.
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Research the Different Types of Life Insurance
Coverage comes in many forms, but life insurance can be divided into two main categories. The first is term, which does not have any cash value for you to use but offers guaranteed coverage for a set duration. Coverage could be annual and highly affordable, or you could decide to buy a contract that lasts 10, 20 or even 30 years. If you keep a term policy for this long and are still alive at the end of it, you may be entitled to a return on your premiums, so long as they were consistently paid on time during the length of your agreement.
Whole coverage is also called permanent life insurance, and it covers the insured as long as they live. This form of coverage has significantly higher monthly premiums due to the fact they accrue a cash value with credited interest. This value can be cashed in later or borrowed to help you cover personal expenses. You can even use a sell your life insurance calculator to estimate how much your policy is worth. In the event you are diagnosed with a terminal illness, selling your coverage in a viatical settlement can give your family the funds they need to care for you and take care of themselves after your death.
Use an Independent Agent
You should not buy life insurance from a captive agent who can only sell policies from a single company. Independent agents work on commission, and they are not obligated to push one company’s packages over another’s. Instead, their focus is on getting their clients the best coverage and benefits for their income level. Someone who is licensed to sell policies from multiple life insurance providers will give you the greatest coverage options and walk you through the process with as little hassle and confusion as possible. If you decide to buy completely solo, that can easily be done online thanks to free quote calculators. Requesting a quote from at least three different companies on your preferred policy type will give you the greatest advantage.
Buy the Minimum Amount
Don’t think that every life insurance policy with a cash value is a great investment opportunity. Some companies rope their clients into expensive contracts that ultimately cost them far more than they’ll ever earn, even if their six-figure cash value is enticing at first. Think about how much a premium costs and whether it could benefit you more deposited into a savings account; you can always put money away and generate interest while having the peace of mind a more affordable, term-based policy brings.
Weigh your options, consider your budget and don’t be afraid to go low at first. You can always upgrade or buy a more expensive policy later, but the main purpose of life insurance is to offer a death benefit to your friends and family, not make you rich in a couple of years.
