How do I buy life insurance ?

Many people who buy a life insurance is a first-timer, so the whole process is entirely alien to them. However, once you’ve decided that you need life insurance, especially if you have dependents, you have to learn the process in choosing a good life insurance policy. Since there are various types of policies, choosing one can be an overwhelming task.

Here’s what you do: determine what type of policy you want and can afford – term, variable or whole life. Many experts suggest getting a term insurance due to its affordability and effectiveness. It does what you need a life insurance plan to do – give money to your dependents and creditors after you’re gone. Since the other policies include an investment side to them, experts recommend keeping your investments separate from the insurance.

The next thing you need to do is choose where you’d like to buy a policy. Most local agencies provide quotations, so you could compare the terms. However, whichever company you go to, make sure that the policy you obtain is a ‘pure term’. Many agencies would try to offer you other policies, so be on the lookout for up-sells you’ll receive when inquiring. Make sure to get several quotes before sealing the deal. Some companies would urge you to buy policies for you dependents, but this should not be the case.

Generally, you have two options when buying term insurance – Annual Renewable Term and Level Term. While both of these policy options are good choices, some people may prefer to go with a large term policy of 20 years to ensure their children would not have to worry until they become of legal age.

Always do your homework before signing a policy. Make sure you understand everything that is printed out on the contract, so you could make an informed decision.

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