Life Insurance: 9 Tips When Buying for the First Time

It can be hard to imagine a life with a restricted earning potential. Indeed, everybody understands that life is unpredictable, and the pandemic has shown us the picture pretty well. Therefore, it is necessary to insure your life to protect your loved ones from uncertainty.

Life insurance will ensure that your loved ones won’t have to pay the mortgages or loans you have acquired in your lifetime. Also, having life insurance leaves a legacy for your spouse or children behind.

But if you’re new to life insurance or planning to buy a new one, the complexities involved must not discourage you from applying. Since we understand how challenging it could be for you to understand everything about insurance, we have compiled a few points to consider when buying a life insurance policy for the first time.

1. Identify What Plan You Can Afford

Indeed, every individual wants the best plan for themselves in practice to give a better life to their loved ones. However, not every plan has the same premium. And therefore, you have to identify what premium you can afford annually for a life insurance policy.

You can also discuss it with your financial planner, who can help you assess your life goals and understand what kind of legacy you want to leave for your spouse or children.

2. Assess the Coverage You Need

It could be challenging for individuals to identify how much coverage is right for them at times. Generally, people estimate the coverage relatively less than they actually need. They often miss to calculate the regular monthly expenses like utility bills, children’s education, etc.

Here’s a hack that can help you with it. Always have a policy that provides ten times your current annual income as a coverage. Doing so will also help you plan according to inflation for a specific period.

3. Finding the Right Policy Plan for You

Once you have identified how much you can afford and what coverage you need, the next important thing is finding the right policy plan. There are two types of plans available for you to consider, (i) term insurance and (ii) whole life insurance.

What plan you choose depends on your goals and finances. However, here’s a distinction between the two that will help you make a better decision. Term Insurance provides coverage for a certain period, i.e., 10, 20, or 30 years, and that’s why found to be relatively easy on the pocket. 

Meanwhile, the whole life insurance policy provides lifelong coverage. That’s why it is costly compared to term life. Another advantage of having a whole life policy is it adds your cash value. You can use that cash the way you like, such as using it as an emergency fund, paying long-term care, or can cover the policy premiums with it.

4. Compare the Different Companies for a Best Rate

When it comes to buying life insurance, you must compare different companies to save the best deal. Many companies offer free quotes on the web, and you can compare them with the ones on top of your mind.

Besides considering quotes from insurance companies, you can consult independent insurance agents associated with different companies to help you suggest the required coverage at the best rate.

You can also consult Alpha Omega Group Insurance that offers several insurance options such as car insurance, life insurance, home insurance, etc., at a relatively lesser cost.

5. Consider Your Current and Future Needs

Life insurance is more about tomorrow than today, and that’s why it is essential to consider your future needs strongly before purchasing any policy. On the other hand, since life is unpredictable, ignoring your current needs will also ruin the meaning of having life insurance. Therefore, you must consider both needs.

Consider your current needs, such as children’s education or your side business’s expenses. And then see what else you or your family need money for in the future, such as your child’s college tuition, retirement savings for your spouse, etc.

6. Consider Critical Illness and Disability Insurance

Indeed, many people live extraordinary lives throughout, i.e., free from critical illnesses and disabilities. However, life is unpredictable and, unfortunately, can show you the days you never want to face. Your body might develop a disability for any reason, or you might suffer a critical illness, depriving you of working for a more extended period.

Therefore, combining your life insurance with critical illness and disability insurance is a good idea. It makes sure that you don’t have to exhaust your savings when experiencing specific incidents.

Consider at least six to twelve months of expenses covered in the policy so that your earning power is protected during tough times.

7. Seek Professional Assistance

You can also contact licensed insurance agents or professionals associated with different insurance companies; those not only help you find the right policy but also help you with the budget you have. You can also have a transparent conversation with the agent with all your doubts regarding the policy before making the final purchase.

Not even this, by building a relationship with the insurance agents, you or your family can reach out to them as well when in need of assistance when making a claim.

8. Prepare to Answer Several Questions When Applying

Your life insurance premium can vary depending on your age, health, acute illness, or work you do that exposes you to higher risk. And that’s when you have to go through a detailed application where you have to answer all of these questions regarding your mental health, physical health, and even your and your family’s medical history.

If you are younger, your premium can be lower as you are less exposed to diseases associated with aging. Besides your age, questions like tobacco consumption can also be asked during application to determine your actual insurance rate.

9. Invest in a Sound Company

When purchasing your policy plan, you definitely don’t want it to fall flat at the end. And that’s why you must purchase from a reputed insurance provider company. In addition, the company must be financially strong to pay the claims when called by your loved ones. 

Alpha Omega Insurance Group Solutions has experience in the insurance sector for more than 15 years and has won over 45 awards for their practices. If you want to know more about our claim procedure or policy plans, you can schedule a free call with us.