Wondering what to look for in a life insurance policy and if your chosen policy will meet your specific needs or not? Read on to find out!
If you’re an earning adult with kids, a house, and various other financial liabilities, then you should definitely look into buying a life insurance policy. With it, you won’t have to worry about the financial strain that your dependents would have to bear in case of your unexpected passing.
But, what exactly is one supposed to look for in a life insurance policy? Due to the wide array of life insurance policies and insurance companies selling them, you need to make sure to conduct some thorough research before choosing a policy for yourself.
So, here are some things that you need to look for in a life insurance policy:
Reasonable Price
Did you know that a 20-year term life insurance policy for $750,000 would set you back by $717.50 yearly, while a whole life insurance policy with the same coverage will cost $9,875 every year? It’s true! This is something that you really need to consider when buying a life insurance policy. The affordability or lack of it is the first thing that you need to consider when looking for a life insurance policy. You need to make sure that you will be able to pay for it even when you are in a financial crunch. So, make sure to plan on a premium that you can afford in the long run.
Instant Payout
There are simplified issue life insurance policies that offer swift and easy coverage without any medical exam. It’s true that these policies have only a few quick questions on the form and no medical exam, which allows you to easily qualify for them. However, oftentimes, there’s a strict two to three year after-purchase waiting period before the issuer will pay out all the proceeds upon your death. This surely defeats the purpose of taking out a life insurance policy for someone who wants the coverage to start right away. So, make sure that you opt for a policy that pays 100% of the death benefit from the first day.
Automatic Payments
Make sure to choose a life insurance policy that has an automatic payment feature such as a credit card draft or an automatic bank draft. This is because if you have a manual payment plan and forget to make your payment on time or within the set grace period, your policy might be canceled. At this point, it is up to your policy issuer to allow you to pay your missed premiums or not. Moreover, they are not even obligated to reinstate your policy. If you have a policy with automatic monthly payment, you won’t ever have to worry about missed premiums or policy lapse.
Conversion Feature
If you are on the lookout for a term life insurance, then make sure to look for a policy that has room for you to convert it into a permanent one if need be. It will allow you to change your term policy into a whole life policy without proving that your medical health is in good shape. So, make sure to look for a term policy that has this convenient conversion feature, which will allow you to keep your coverage even if you have developed a medical condition.
Living Benefits
There are numerous new life insurance policies cropping up that allow you to use your life insurance while you’re living. For instance, some policies offer you the option to get payments if you get a chronic illness. There are several other policies that allow you to receive the full premium that you put into the policy after a period of 20 to 25 years if you no longer need it. So, if you have a hereditary illness in your family or if you want to take measures to prepare for your end-of-life care, then make sure to opt for a policy that accommodates these needs.
Make sure to consider the above-mentioned factors when looking for a life insurance policy and choose one that meets your needs the best.
