Factors you should take into consideration for life insurance planning

by Sam Payn

Life insurance is a big investment that you make in your life to protect yourself and also your near and dear ones. Now, there are certain factors that should be taken into consideration while you are looking for a policy. You need to buy a policy which suits your budget and also fulfills your requirements. A life policy can help you pay off your debts, maintain your standard of living, and give you absolute peace of mind. However, it is also necessary to determine whether life insurance is right for your needs and whether you can afford it. Given below are certain factors that you should take into account before buying a life policy:


Your premium expenses

The premium is the cost that you need to bear every month till the end of your policy against which a cover is offered to you. When insurers calculate the amount of monthly premium, they factor in the following elements:

- The gender of the insured
- The age of the insured
- His/her medical history
- Whether the insured person has a smoking habit
- The tenure of cover chosen by the policyholder
- The amount of cover required by him/her
- The kind of life cover he/she needs

The premium costs of term life insurance policies are normally higher than whole life policies since the tenure and cash value of whole life policies are higher than that of term life policies.

Do you really need life insurance?

If you belong to any of the following categories of people, then life insurance is right for you:

- If you are newlywed or contemplating to begin a family. The premiums will normally be low at a young age.
- Parent. If you are a parent, then you need to think about buying life insurance since their kids are entirely dependent on their earnings. When the kids would grow up, the significance of life insurance will go down. Both parents should go for cover as it would effectively assist the existing parent to take care of his kids.
- If your spouse is not working. If you pass away in an unexpected manner, then life cover will offer financial support to the spouse who is not working at that point of time.

Comparing policies

Comparing between policies is a surefire technique to find the most suitable cover for your requirements. However, you need to remember that comparing similar types of policies is necessary. This is also known as comparing apples to apples. Comparing different types of policies and cover will not help you make a good decision.

Buying cover from a licensed company/agent is important

Make sure that the company you are buying cover from has the license to operate in your state. In the event of your carrier becoming bankrupt or insolvent, your family will not be receiving any payout.

Giving up smoking

Quitting smoking and other addictions is necessary for getting an affordable life insurance quote. Studies show that smokers are more prone to cardiac ailments and lung diseases.

Ways to prevent yourself from a life insurance fraud

You can always save yourself from falling into a trap created by fraudulent insurance companies by doing the following:
- Don’t ever sign a blank application
- Don’t ever make cash payment for a cover
- Don’t purchase insurance on the telephone
- If possible, take a friend with you to talk to the agent

Author bio: Sam Payn is a vigorous blogger who has covered a range of insurance related topics. He has authored informative articles on relevant life insurance covers.

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Oct 09, 2015
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