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The Starter’s Guide to Buying Life Insurance

The Starter's Guide to Buying Life Insurance

People have plenty of questions when they’re considering life insurance for the very first time.

Are you thinking about buying life insurance? You are not alone in the decision-making process. People have plenty of questions when they are considering life insurance, and Healthcare American is here to help. Check out this starter’s guide to buying life insurance, so you can become informed, and be on your way to finding the right solution that is best for you and your family.

Who Needs to Buy Life Insurance?

If you have a spouse, children, or older parents who depend on you for financial support, then buying life insurance to provide them with a financial safety net and support, is a smart move.

Life insurance is a good investment if you have any co-signed debt, like a mortgage or student loans that could potentially transfer over to another person and be their financial burden in the event of your passing away. It is wise to invest in life insurance policy, to ensure the people you care about are well taken care of if the situation arises that you are not here any longer to provide because of your passing.

Which Kinds of Life Insurance are Available?

There are many different types of life insurance products available, and they typically break down into two main categories: term life insurance policies and cash-value policies, also referred to as Whole Life, Final Expense, and Universal Life.

Term policies are a trendy choice for Americans because they are pure insurance. They’ve got low monthly payments and have a very straightforward structure. They work like this. If a person should pass away within the term period of your contract, the insurance company will pay the beneficiary listed in your policy, a death benefit based according to the contract terms. Term policies can usually be purchased for a duration of ten years to 40-year terms, and are priced based on the age and health of the individual applying. Term life insurance is an excellent option for when a person has a period in their life that they have high expenses and more time-critical responsibilities. Typically, term life insurance is purchased for an individual or family that they may have young children or a mortgage payment they are responsible for and will be relied upon for their income during this period of their life.

Cash-value policies such as Whole Life, Final Expense, and Universal Life are a bit more complicated because they usually involve both the pure insurance component of a term policy and an additional investment component. These types of policies typically are more expensive than term policies, for the equivalent amount of life insurance coverage. They last as long as you keep making payments, so they can last you a lifetime, as long as your premiums are paid. Payment varies quite dramatically based on underlying investment performances, as well as the cost of insurance involved. Purchasing these types of policies will take a knowledgeable agent to help you find the right product based on your situation. The decision on what kind of policy will fit your needs can be based on your financial capabilities, needs, and desires of insurance being purchased, and the goal and purpose of the insurance policy. There could be many reasons a person might want a cash value policy, such as a cash value they can potentially use in retirement, or a legacy they can leave to their family, business, or charity at the time of their passing. 

Please keep these important factors in mind when purchasing a life insurance policy. We are here to help you understand what policy best suits your individual situation.

When is the Best Time for Buying Life Insurance?

The simple answer to this is sooner rather than later. When a person is healthy and young, they are a lower risk to insure, so the premiums might be less. Getting life insurance early helps you “lock-in” pricing when you are young. Since term life insurance offers a guarantee that your monthly payment will stay the same throughout the term of your coverage, buying insurance when you are younger will always cost less. This could provide a more affordable life insurance payment that will last for the whole term of your policy, and could save you money for years to come.

If you have any questions regarding life insurance or would like to purchase a life insurance policy, or if you need additional assistance with your retirement plans, or Medicare coverage options, call Healthcare American today!

Independent Healthcare Insurance Brokers You Can Trust

Healthcare American is an independent insurance broker that you can trust with all of your personalized retirement planning needs. We provide customers with healthcare, life insurance, and retirement plans, tailored to their personal needs and individualized situations! We will provide the best insurance plans and tailor-made retirement plans to those living in the Baltimore, Washington DC, Virginia, Delaware, and Pennsylvania areas!

For more information and a free online quote, visit our website, send us an email, or give us a call at (443) 537-0555.

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This entry was posted on Friday, March 27th, 2020 at 3:29 pm. Both comments and pings are currently closed.