How to Get Life Insurance
Life insurance provides coverage for your final expenses, easing the financial burden that can be placed on the loved ones of those who neglect purchasing this vital protection. Use this guide to learn how to get life insurance so that you can start enjoying the peace of mind that it offers today.
A life insurance policy is a legal contract between an insurance company and an insured individual. This type of coverage attempts to assign a numerical value to a human life, offering a stated amount as the payout to be received by the pre-designated beneficiary in the event of the insured individual's death. The most important considerations to make when purchasing a life insurance policy include:
- Term or whole life? Term life insurance offers coverage for a set period of time at a low monthly premium. Term insurance policies are not likely to extend past twenty years so it is most beneficial to younger policyholders who are simply looking for the added peace of mind that a life insurance policy gives. Conversely, whole life insurance remains in force for the entire lifetime of the policyholder and is often more costly than a term life insurance policy for that reason. Many older policyholders opt for whole life insurance because they are less likely to be dropped due to age or illness.
- Individual or group? If your employer offers life insurance it will most often be less expensive to purchase life insurance via that method. Group coverage spreads risk amongst a large pool of people, causing a minimal monthly premium for each insured person. Individual life insurance can be more costly but gives you the ability to purchase the amount and type of coverage that best fits your needs.
- Lump sum or monthly premium? Some life insurance policies offer the option to either pay for the entire policy up front or issue a monthly premium. Policies that require an up-front payment feature a "balloon payment," a large fee that must be paid mid-term in order to keep the policy in force. Policies with fixed monthly premiums avoid this fee, allowing you to plan your finances accurately.