How to Choose a Life Insurance Policy
You and your wife have just found out that you are going to be parents. You're excited and full of questions. What kind of father are you going to be when your baby comes? Will it be hard raising a child? So many questions; not enough time to answer any of them. One thing: You must make sure your family will be taken care of, no matter what.
- Ask yourself why you need or want a life insurance policy. If you have a family, a life insurance policy is an excellent investment, because it helps soften financial blows if something happens to you.
- Ask yourself how much money is needed to carry your family if something ever happened to you. This helps you to determine how valuable you want your life insurance policy to be.
- Search the Better Business Bureau website for life insurance companies. Narrow the list down to the top three. Check out reviews for each company. Call and ask for references and get the clients' point of view.
- Ask each company questions about the different types of insurance policies they offer.
- Remember some of these tidbits when discussing life insurance with an insurance agent: A whole life policy gives you excellent coverage with a fixed premium, giving you the option to receive dividends. A variable policy allows you to accrue non-taxable cash. A universal policy allows you to borrow against it, while fine-tuning your premiums.
- Determine how much face value you want your policy to have. Calculate how much you make a year and multiply that by 6. Do this for as high as you expect your income to grow within the next five to six years.
- Get multiple quotes. Preferably, get them from the top three insurance agencies based on ratings by Moody's, Standard & Poor's and the Better Business Bureau.
- Ask to be put on speed dial when new deals and bargains come up concerning better coverage.