You need to be patient while buying life insurance. There is no need to take a quick decision that you may regret letter. The first thing you need to do is to meet a life insurance agent and understand the different kinds of policies available. You should treat it like a quick primer on how to buy life insurance.
After this, you need to visit the websites of major insurance companies to find out the different policies they offer and the premiums they charge. Make a comparison, and decide which one is best for you.
You can go for term life insurance which offers coverage for a specified time period or cash value life insurance which is a combination of death benefit with a cash value component. Term life insurance policies are quite affordable but they are temporary to some extent. Some of these policies can be converted into permanent ones.
The periods of term life insurance normally range from 1 to 30 years. Policies should be chosen according to personal requirements. If a person wants to buy a policy to protect his 8 year-old twins till they pass out of college, he should take a policy with at least a 15 year term.
The coverage amount depends on factors like the money required by your survivors, the money you have and owe, and the insurance policies that you may have bought earlier. Married couples should have policies for both, especially if both are earning.
You also need to look at your capacity to pay premium. The premium depends on a lot of risk factors like your age, health, use of tobacco, family health history and the type of life insurance, that determine how much you have to pay. In term insurance policies, the premium may increase as the term passes.
You should also compare policies that are similar in nature and size and those that are offered by good companies. The rating of the company should be good; it should be financially strong and have the ability to pay claims.
After deciding upon the policy and the company, complete the application form with all the relevant information. There will usually be a medical test, sponsored by the company. The company will assess your application and the medical test and would decide if you can be issued a life insurance policy.
The life insurance contract should be read thoroughly before signing. It gives you details about the policy provisions, amount of benefit, premiums and premium guarantee period. You should reject the policy if some clauses don’t suit you.