Buying Life Insurance for the First Time? What You Need to Know

By the time that you are ready to invest in a life insurance policy for the first time, you may feel that you are already well versed in insurance options. From car coverage to homeowner’s insurance, there are plenty of different boxes for consumers to tick off when selecting the insurance options and features they prefer. It is only when the time comes to think about how much life insurance you really need and can afford do you begin looking at the overall picture. Consider your age now, the financial burdens that will be passed on to your family with your passing, and how your business will cope without you, and choose a life insurance product that will help you to feel secure.

Whole and Term Life Insurance
Did you know that there are life insurance products available that buyers can borrow against? With life insurance, there’s two main categories that consumers have available to them. Whole life insurance is generally offered to people who are younger and in good health. After paying your premiums for a while, whole life insurance policies increase in value. It may be five or even twenty years before you are able to borrow against your whole life insurance, but the main benefit is that you will still have coverage as well as cash available to you. On the other hand, term life insurance is only paid out to beneficiaries after the passing of the policyholder. Both forms of life insurance have their benefits, and you need to be the one to compare all their advantages and disadvantages.

Purchasing Multiple Life Insurance Policies
There are no rules that prevent you from buying life insurance policies of varying amounts from different insurers. In fact, you can even buy term and whole life insurance policies from one or several companies. This is not an uncommon practice as many people get life insurance coverage through their employers, but also choose to supplement with outside insurance products. For instance, your employer may offer you up to $100,000 in life insurance coverage at a reasonable rate. On the other hand, you might have an outstanding mortgage for much more than that amount, not including credit cards and other bills. If you want to be able to leave some cash behind for your family, it is obvious that you could purchase several life insurance policies for the betterment of your family’s financial future.

Life Insurance Affordability
Although many people find life insurance to be affordable, it is an expense that has to be factored into your monthly budget. Just as you need to pay your electricity bill consistently to keep your home powered, your life insurance premiums must also be paid by a certain date or you risk losing benefits. So, in other words, you should only buy life insurance if and when you are sure that you can afford it long-term. Finding a policy that falls within your current budget is vital. Remember that more life insurance can be purchased when your financial situation improves. For some people, this may mean increasing the amount of coverage they have on existing life insurance policies. For others, additional life insurance policies may be purchased.

Naming Life Insurance Beneficiaries
When you purchase a new life insurance policy, one of the first questions you will be asked is who you want the beneficiary to be. At present, you may be certain that you want your spouse, child or sibling to be named as the beneficiary, but realize that sometimes circumstances can change a lot of things in your life. Your sibling may eventually come into a large sum of money and no longer need to be named as your beneficiary, or you and your current spouse might part ways. The good news is that you are free to change your beneficiaries as many times as you like and it is actually better to keep your insurance policy up to date, especially if you don’t have a will. Know that you can also name multiple beneficiaries, so that you know that your life insurance policy will be paid out to everyone that you love.

Health and Age Factors
As you get older, life insurance options tend to narrow. Health factors can also impact what type of life insurance you are able to afford, as smoking and chronic diseases can make you more of a risk. This is why it is important to take care of yourself keep paying your premiums so that coverage never lapses. As soon as you can, speak to a doctor about improving your health if you feel that health factors or age are impacting your life insurance coverage so that you can make positive changes that will influence your life as well as the amount you pay in premiums.

Buying your very first life insurance policy consists of little more than filling in some forms and sending them in the mail with your first payment. Soon, you should be getting your enrollment letter that spells out the terms of your life insurance coverage in plain language. Know that buying life insurance is a move that will keep your family financially safe even when you aren’t around anymore.

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