How To Choose The Best Life Insurance Policy

Things You Need to Know Before Buying Car,House, Health & Life Insurance online.

Insurance Buying Tips #1: Shop smart
When looking for insurance, your No. 1 priority should be to find adequate coverage. Price is important, but you’ll want to determine what kind of coverage you need first. Then you can fit that coverage into your budget and determine which carrier can provide you with the most comprehensive policy for your situation. You may be tempted to choose insurance with the lowest price tag, but if you don’t have enough coverage (or the right kind of coverage), you will see less financial benefit when it comes time to file a claim.
Insurance Buying Tips #2: Look for discounts
Once you evaluate your coverage needs, factor in your budget and find ways to save. Ask your insurance agent if there are any discounts on your coverage. Often, carriers offer discounts for things like paying your policy in full, staying auto accident-free or, if you’re in school, getting good grades. You also can save money by “bundling” multiple policies, such as purchasing a home and auto policy from the same carrier.
Insurance Buying Tips #3: Fill in the gaps
An average policy will cover the basics, but you may need to add extra coverage to meet your unique needs. For instance, you may have items like electronics or a nice piece of jewelry that would be financially difficult to replace, even with the assistance of your average renters or homeowners policy. You may want to add additional coverage for these items.

Choosing the best insurance policy is quite a daunting task. Many insurance agents or companies are quick to tout life's virtues in part because of its high commissions. However, in reality, there are many factors that you must consider before deciding on the best insurance to buy for you and your family.

Before one decides to get insurance and waste all your time deciding what policy is best for you, consider this first:

Do I need a life insurance?

Although a life insurance provides security and financial protection for family members, especially for the spouse and children, the need varies depending on one's personal situation. If you do not have any dependents, then you don't probably need insurance. If you are not the main provider or you're not the one who generates a significant percentage of your family's income, then it is not necessary for you to purchase it.

On the other hand, if you are the main breadwinner or if your income is important in supporting your family and covering your family's financial obligations such as paying the mortgage or other recurring bills, or your kids' college/university fees, buying an insurance is important in order to ensure that these financial obligations are covered in the event of your death.

What Type of Life Insurance Is Best?

Before one collects insurance quotes and compares them, it is important to have a better understanding about life insurance.

Life insurance has 3 major options or kinds: Term, Whole Life, and Return of Premium

Term Life Insurance

Term life provides a set amount of coverage for a predetermined amount of time such as 10 to 20 years, and premiums are generally set at a flat rate. For most people, term life policies still offer the best combination of coverage and cost. It is the most popular because it is the lowest-cost way to get the most coverage for a shorter period. Since it has a renewal option, it is much easier to walk away from a policy if you find a better deal or when your needs change.

Pros:

It's Affordable. Term life is the cheapest type of life insurance. It has a reasonable rate that enables people to buy policies with larger face values than they could otherwise afford.

Easy To Buy. All you need is to determine how much you need (amount of coverage) and how long you'll need it (the term of coverage) and then you can get an insurance quote from among the Insurance companies in Australia and find a competitive rate.

Insurance Buying Tips #4: Purchase life insurance—you aren’t too young
Life insurance is essential, no matter how young or old you are. And for millennials, buying now may be a smart move because it’s cheaper to buy a life insurance policy when you’re young and healthy. This kind of insurance can help your family cover unexpected costs in your absence, including student loan debt or a mortgage, in addition to end-of-life costs. And if you have kids, a life insurance policy can also support their education or childcare expenses. Additionally, every millennial should consider long-term disability coverage, which helps you stay afloat financially if an accident happens and you become disabled and unable to work.
Insurance Buying Tips #5: Talk to an independent agent
An independent insurance agent is an essential resource when purchasing insurance—especially if this is your first time. An independent agent works with multiple different carriers, which is different from captive agents who can only sell insurance from the carrier they work for. Working with an independent agent can help make sure that you are getting the best coverage, for the best price. You’ll also benefit from independent agents’ insurance knowledge; they know how to talk you through your options and actually explain what each policy includes. An independent agent will make sure all of your assets are covered, help you find discounts or other ways to save, and be a valuable resource as your life changes and your insurance needs change, too.
Insurance Buying Tips #6: Only buy insurance to maintain your existing standard of living
You don’t need insurance for events that won’t severely strain your finances. Start with your basic needs (home, auto, business), then work your way to include other needs (cyber, liability). You can always obtain coverage later for something if you change your mind. You can minimize your risk and maximize your savings by buying insurance that won’t cause you to break the bank.

Covers A Temporary Need. Term life only covers a specific period such as 20 or 30 years so if you and your spouse have saved a generous retirement stash and your kids are in college or are now working, you might find yourself not in need of a life insurance in the future but only require it for a specific period.

Renewable. Term life is renewable in 1 year-increments with increasing premiums so it is much easier to terminate it if you find a much better deal because of this option.

The Cons:

It has an expiry date. If you find yourself still in need of life insurance after it expires, it might become tougher to get term life as you get older. If you're not in good health, this might make you ineligible for coverage.

NO Money Paid Out. Term life expires so if you live past the expiration date i, or cancel it at any time i, no money is paid out, you get nothing back.

Whole Life Insurance

Also called Permanent life, Whole life insurance provides you protection throughout your entire life.

The Pros:

It's Permanent. Whole life policies NEVER expire, provided that you have paid your premiums regularly.

Forced Savings. Whole life premiums are not cheap because this type of policy builds up a savings account or “cash value” that grows tax-deferred, and which can be tapped in retirement.

Fixed Premiums. Though Whole life premiums are much more expensive than term, the premiums stay the same over the life of the policy, which stays in effect until your death, even after you've paid all the premiums.

Guaranteed payouts. The primary advantage of Whole life is the guarantee that your policy will be paid out, unlike a term policy.

The Cons:

Expensive. Because this type of policy builds up a savings account or “cash value” that grows tax-deferred, it's premiums are not cheap.

Return of Premium

The Pros:

It's a compromise. A return-of-premium policy provides a death benefit that is paid out should you pass away. However, if you outlive the Investment Insurance policy, you only get all of your money back dollar for dollar with no interest. So no matter what happens to you whether you die while covered or outlive the policy, money is distributed.

Affordable. Though a return-of-premium policy isn't as cheap as term life, it is still much cheaper than whole life. A return-of-premium policy will cost approximately 50% more than a comparable term life plan.

Easy to Understand and Shop For. Return-of-premium policies are easy to shop for and easy to understand.

Insurance Buying Tips #7: Ask your insurance provider what the policy doesn’t cover
Every insurance policy has perils that are not covered by your policy. These perils are referred to as “exclusions”, and every policy has them. Ask your insurance provider to explain the exclusions in your policy to avoid discovering what they are once you incur damages or a loss.
Insurance Buying Tips #8: Consider bundling several policies with one insurance carrier
here may be value in bundling several policies with one insurance carrier. If you’re looking to insure multiple vehicles or obtain multiple types of business coverage (e.g., liability, property, cyber), then you may want to consider obtaining coverages under one insurance provider who carries multiple products, and who may be able to offer you multi-policy discounts or loyalty programs.
Insurance Buying Tips #9: Review your insurance needs on a yearly basis
As your needs evolve, so will your insurance policy. Maybe you’ve acquired a new vehicle since obtaining auto insurance for your primary vehicle, or started operating your business out of your home, or experienced a cyber-attack during the year… Whatever the change(s), you’ll want to make sure you’re covered for any new risk exposures. Talk to your insurance provider to stay on top of your insurance needs.
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