What You Should Know Before Taking Out Life Insurance

Nobody wants to talk about life insurance, since it confronts us with one of the more unpleasant realities of life – our mortality. We don’t want to face the fact that we will die someday; it would be easier to just put it out of our minds. But life insurance is an essential part of the sound financial planning that we have to undertake in order to protect our loved ones if the unthinkable happens. There are a few things, however, that you should know before purchasing life insurance.

First, how much coverage do you need? To get an idea of how much insurance you should have, add your debt, estimated funeral expenses and your income for six months to one year. This amount will determine the amount of coverage you should have and the policy that you need to take out.

Second, what type of policy should you have? There are four basic types of life insurance: term, whole, universal and variable. Term insurance provides only protection for a certain period of time; whole life provides coverage for your whole life as long as your premiums are kept current; variable life is a permanent policy that also allows the holder to allocate some of his premiums to investment options; and universal life allows the holder to select investments.

Third, what company should you deal with? Obviously you want a dependable insurer who will still be around to service your policy and pay the claims. To determine which companies you should deal with, you can turn to ratings agencies, which provide independent assessments of a company’s capacity to pay its claims and meet its financial obligations.

Once you have a general idea of the kind of life insurance you need, then you can go on to the Internet and get quotes online. At Insure4USA.com You can compare free quotes online from different insurance providers. But keep in mind that the quotes you get are not final, since they can still change depending on your application and the results of your medical examination.

Speaking of medical examinations, you should also know the state of your health, since this will determine how much you will be charged in premiums. You might as well also reduce your health risks by quitting smoking, changing to a healthier diet and losing weight if you’re overweight.

Before you decide on a policy, you should also understand all its terms and conditions. Discuss these thoroughly with the agent before you commit. Some things you should ask him are: Will my premiums increase and if they do, when will the increases start? Can I convert my policy from one type to another, and if I do, what are the requirements of such conversion? What other features does the policy have?

In order to discuss these matters knowledgably with the agent, you should do your homework and familiarize yourself with some basic insurance terms and concepts such as face value, cash value and convertibility.

Being aware of the above information will ease the process of buying life insurance and ensure that your loved ones are well provided for when the worse happens.