According to the president and CEO of Life Happens, Faisa Stafford, buying life insurance is not all that different to ordering a coffee at Starbucks – the large number of options make it hard for a buyer to know what they need.
As a matter of fact, according to a survey conducted by LIMRA and Life Happens, confusion about the type of insurance to purchase is one of the main reasons that people steer clear of buying a policy at all.
If you are a first-time insurance buyer and can relate to the above, you will likely find the below tips by Bill Schantz of Mid Atlantic Financial LLC useful.
Tips for First-Time Life Insurance Buyers by Bill Schantz:
Tip 1 by Bill Schantz – Determine Your Life Insurance Objectives:
The very first thing that Bill Schantz advises first-time insurance buyers to do is determine the reason(s) that they want a life insurance policy in the first place.
Determining your life insurance objectives will help you identify the best policy option for you. For instance, if you want to protect your family’s financial stability in your absence, you should go for a term insurance plan providing affordable rates and high coverage.
If your objective behind buying life insurance is to support your post-retirement life, you could purchase a retirement plan that offers a regular income stream.
Tip 2 by Bill Schantz – Understand the Factors that Might Affect Your Insurance Rates:
The two primary factors that a life insurance company will consider when determining the payment rate are your age and health. The earlier in life that you buy life insurance, the cheaper it is going to be. This is because age and health tend to have an inversely-proportional relationship, and insurance companies find it less risky to insure the lives of younger, healthier individuals.
Other factors that determine the insurance rate are the kind of policy that you buy, the size of the death benefit, and the term length that you choose.
Tip 3 by Bill Schantz – Be Truthful With the Life Insurance Provider:
If you are employed in a hazardous industry (such as coal, fertilizer, or cement industries), or consume cigarette, alcohol, or other such substances, you need to be transparent about these details with your insurance provider. In addition, you must also inform about any current illnesses, as well as reveal a family history of any ailments that might put you at greater risk down the road.
Bill Schantz says that all of these factors play a role in determining your risk profile, and you need to provide full and accurate information to avoid claim rejection in the future.
To sum up, life insurance is a key financial tool, and can go a long way in protecting you and your loved ones. Keeping the above tips by Bill Schantz in mind will alleviate some of the confusion surrounding life insurance policies, and help you make the right decision.