5 Things to Know When Buying Term Life Insurance


“There are worse things in life than death. Have you ever spent an evening with an insurance salesman?” – Woody Allen.

That’s just a lighthearted poke at one of the most important family decisions we have to make. Do I need to purchase insurance? The answer is a resounding, “Yes!” Our safety and security is never guaranteed in this life, and the families we provide for are always one step away from potential disaster. Insurance is a must-have safety net. Here are 5 things to know when you shop for the plan that is right for you.

1. Who should be insured? Anyone who doesn’t have the funds readily available to cover all debts and funeral expenses, and offset the loss of their income to their spouse and children should purchase life insurance. This means most people should purchase insurance, including stay-at-home parents that provide valuable services and care for their families.

2. Why Term Insurance? There are many different types of life insurance, but term life insurance generally provides the most amount of coverage for the least amount of money. There is no saving component to term life insurance, but most advisors say to purchase lower cost term insurance and invest the remaining money elsewhere.

3. How Much Do I Need? The more coverage you purchase, the higher the premium. So it is important to review your family needs and what you want your coverage to achieve. Do you want to just be covered for debt and funeral expenses or would you like to leave additional money to family or charities? Experts suggest your coverage should be five to ten times your annual, pre-tax income.

4. When Should I Purchase? The big milestones in life are the moments when life insurance comes to the forefront. Getting married, starting a family or business, or buying a home are times when we seriously consider our financial future. However, the moment we need to consider buying life insurance is actually right now. Life doesn’t care about our milestones and planning; it just happens.

5. Where Do I Go? The internet is a great place to begin your search for the right policy plan for you and your family. As with all types of insurance, there are many providers with different benefits and costs. Start with a broker that can shop for the most cost effective plan.

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