Life Insurance….you know it’s something you need, but it’s something that’s often put-off till later or never purchased at all. When purchasing life insurance many questions come to mind. Some of the most common questions are listed below:
What if I Don’t Die?
This is the most common question when buying term life insurance. When the policy term is over, you get nothing if you’re still alive. Most people are happy to still be alive, but others focus on the premiums that have disappeared. Sometimes, this leads to people waiting till later in life to purchase a policy. This can be risky because it means higher premiums, or the possibility that you are no longer insurable. Most people are in need of life insurance while their family is young and they have financial obligations such as college education for their children, a mortgage, etc.
Some carriers offer a term policy with a return of premium option. This policy returns all paid in premiums back to you, in one tax-free lump sum, if you are still alive at the end of the policy term. It also offers a conversion option. You can forego the lump sum and convert to a policy that will pay the death benefit to your beneficiary upon your death, without paying in any additional premiums. The death benefit is lower than the original face value but still a great option, especially if you happen to be uninsurable at the end of your policy term.
If you want permanent life insurance coverage, which means the policy will pay the face value to your beneficiary upon your death, then you might want to consider whole life insurance. This type of insurance is usually more costly than term insurance and depending on the payment plan you choose, you could end up paying premiums your entire life.
How Much Can I Get?
You will want to consider your financial obligations and what the purpose of the life insurance policy is for (ie: replacement income, mortgage, college tuition, estate planning, etc). It doesn’t make sense to purchase too much, or too little insurance. You want to ask yourself ‘what financial obligations do I have’ and ‘what does my family need’?
What Should I Say to Get a Cheap Premium?
The answer is, be honest. What use is there in obtaining an insurance policy, if later when the policy is needed it is determined that information on the application was false and the insurance provider refuses to pay. You purchase life insurance for peace of mind. This is obtained knowing that your family’s future is secure. When you are asked life insurance questions, you need to think about your family’s future and your financial obligations first. After all, that’s why you purchase a life insurance policy.
If you need advice on your life insurance policy, Gibson can help. Contact us here.
