Choosing the right insurance policy can be perplexing; they are not easy to understand for the first-timers. In this blog, we will go about helping you to choose the right insurance policy for you!
The first fundamental question you should ask yourself before going for a life insurance policy is – Do you really need life insurance? This fundamental question can help you in deciding what type of life insurance you need.
The need for life insurance varies on the situation of the person. If you have people depended on you, then life insurance is required and if there aren’t any then you perhaps there is no need.
Second, if you don’t generate significant income, you might find it challenging to maintain a life insurance policy. At the same time, if you think your salary is intrinsic in supporting your salary finances, then you should ensure the financial obligations in the event of your death.
On the question of how much coverage you need, well, there is no thumb rule. The amount of life insurance you need depends on several factors, such as your total income.
However, to obtain a policy that would be worth in between five and ten times than your annual salary is what you should be looking for.
If you decide to have a life insurance policy, the very next question comes – what kind of life insurance policy you need?
There are several types of life insurance policies such as term life, whole life, universal and variable life. You can choose one out of these according to your requirement.
The cost of life insurances depends on the type of policy you chose, for instance, your employer’s group life insurance plan, these are generally term policies, they will cover you as long as you work for that employee.
The cost of other types of policies varies widely, depending on what type of policy you choose and how much you buy. Cost is also based on actuarial tables that predict your life expectancy.
Which means those who smoke, are overweight or are engaged in dangerous occupation or hobbies will pay more.
While there are several hidden costs such as commissions and fees, you must be aware of these hidden costs before you purchase a life insurance policy for you.
The bottom line is, before you choose any policy, use the internet to discover more about the basics of life insurances. Find the broker you trust so that they can recommend and help to get suitable policies to you.