Life Insurance Issues To Think About When Buying Your First Policy
At some point in your adult life, you might start to worry about how your family would survive financially if you suddenly passed away. It can be sad to think about, but luckily, a life insurance policy can help you protect your family's financial situation in the future. Before you purchase a policy, consider the following.
Getting the Right Policy Type
Term-life and whole-life might not mean anything to you right now, but those are the types of policies you're most likely to buy. Term-life covers a very specific time period; you might opt for this if you'll be working in a temporary position in a dangerous environment or if you only want to cover a child until they are old enough to provide support to themselves.
Whole-life insurance policies, on the other hand, result in monthly payments to your beneficiaries after you pass away. The payments are only limited by the pre-agreed upon amount of the policy, not the time period. Because these policies might pay out for a very long time, your payments are likely to be higher than term-life alternatives. Make your decision about which type of policy you want by carefully thinking about your personal financial situation. Ask insurance agents and relatives to chime in before you make a final decision.
Buying Additional Insurance for Your Partner
It might not initially occur to you that your non-working spouse or partner needs their own life insurance. After all, you may think that life insurance is only applicable to those who have a salaried income.
However, if you think about it, you will realize that your family's financial situation would change if your spouse passed away. You might need to start hiring babysitters or taking your children to daycare, for example. You might end up eating out more often because your spouse is no longer there to cook for the family. Those are just some of the reasons that you should think about whether you and your both spouse need separate life insurance policies.
Remembering to Update Your Policy
Throughout the life of your policy, there will still be events that could inspire you to make some changes. For instance, if you have a divorce after you've started a policy, you may want to remove your ex as a beneficiary. You'll have to update your policy periodically to reflect changes like these, but it can be hard to remember to make these updates in the midst of living your life. That's why, before you even purchase a policy, you need to think about how you'll remember to do those life updates.
As you search for reputable insurance carriers, you might want to ask companies how they assist their customers in remembering to update their documents. One of the things that could sway you toward a particular company is that they send you holiday reminders to review and update documents.
When you've had time to think about the information in the paragraphs above, you can be smart about the decisions you're making when you purchase life insurance. Consult a few life insurance agents in your city to talk more about what kind of policy will best serve your family.