By Senior Law Clerk, Steve Wright
Shopping for a new life insurance policy can be daunting with all of the options available. Not only do different rules apply to each policy, but the premiums that you will have to pay will vary depending on a multitude of factors. Choosing the wrong policy could have negative financial consequences, so knowing what you need out of a life insurance policy can mean the difference between purchasing the correct policy for you and your family or shelling out large amounts of cash for premiums on a policy that may expire or provide inadequate benefits for those you leave behind.
With that in mind, there are some important things to consider and keep in mind before you purchase a life insurance policy?
The first thing you need to know before you purchase a policy is how much coverage you actually need. This will allow you to ensure that when you talk to an insurance agent, you will be able to have the agent show you the correct range of products that will suit your need. Knowing the amount of coverage you require will depend on what stage of life you are in when you purchase the policy. For example, if you are retired with no kids left at home that are under 18 or that depend on your income for support, then the amount of coverage that you will need should be less then a person that is still working age with minor children. However, do not overlook the need to support your surviving spouse which may cost more with age.
Second, you should know how long you want your policy to be in force. Are you seeking a whole life policy that will be in force for your entire life? On the other hand, do you only need more coverage for a limited period of time, such as when you have mortgage payments and small children who might need that support if something happens to you?
Knowing these two important questions will allow you to find not only the policy that fits your needs, but also a premium that is affordable so that your policy does not lapse causing you to loose valuable cash assets. Of course, you should approach the life insurance question as part of a comprehensive estate plan. An experienced elder law attorney can help you answer these questions in the context of your overall life plan.