How To Choose a Life Insurance Plan that Meets Your Needs and Budget

by Hank Coleman

Before deciding on the type of life insurance policy you need to purchase, you should first determine your needs. If the primary reason for buying an insurance policy is to cover your family upon the event of your death, then you will need to determine what exactly the policy will provide. The following tips can furnish you with a checklist to help you decide on a good policy for you and your family.

life-insuranceNo Insurance For Children.  First, do not consider purchasing any life insurance for your children when your primary objective is to buy life insurance on yourself to cover and protect them. Insurance should be used to replace lost income to people who need that income. Unless your children are child actors, there is no income to protect. You should not buy insurance against a child’s life.

Shop Around.  Make sure you choose an insurance agent who can offer you several kinds of insurance products rather than an agent who only represents one particular insurance company. However, make certain you do not obtain too many kinds of life insurance policies. Instead, consolidate your plans into as few policies as you can to reduce the cost of your premium.

Pick Good Companies.  While most insurance companies are good and decent corporate citizens, some are better than others. Pick high-quality insurance companies with great industry ratings.  I have found that a lot of great insurance companies like, USAA, rightfully tell prospective customers what great ratings they earn from insurance industry watchdogs like Moody’s, A.M. Best, and Standard and Poor’s.

Compare Apples To Apples.  Be sure to compare any policies that you are quoted, and make sure that they have exactly the same features when you compare them. To compare policies, find out how much one costs for a set amount of time, such as ten years. If you have young children, factor in the loss of income from you or your spouse and also the cost of childcare for your children when you are trying to consider how much life insurance to buy.

For term insurance, compare the expense of the policy for the time you anticipate on using the insurance instead of the rate for the first year. Also, avoid any rider with accidental death coverage. It is typically more costly than what it is worth.

Above all, do not literally accept any advertisements for life insurance without looking at the terms of the policy and finding out more about the plan, the insurance agent selling it, and the company underwriting it. Make certain that you are fully knowledgeable about how the policy works before you spend your hard-earned money.

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{ 3 comments… read them below or add one }

Ken January 7, 2010 at 10:15 pm

comparing apples to apples is right..you really need to do your homework or you can get duped into something that is not good for you.

Chiefa's Insurance Guide January 11, 2010 at 11:47 am

Very nice tips!!!! Just like you look around a lott before buying a laptop, do it before buying a life insurance policy.

Larry January 12, 2010 at 1:25 am

Nice post. Before finalizing your insurance policy educate yourself about it. I came across this site, it seems to contain very informative and nice information and also gives you an option to compare quotes.
http://www.long-term-care-insurance-planners.com/information.html

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