With the right life insurance policy, you’ll have peace of mind knowing your family will be financially supported after your death. But finding the right life insurance policy can be tricky. As you explore different policy types, these tips can help you decide which is best for you.
Modified whole life insurance is a life insurance policy with a different premium structure. Premiums start off low, then increase over time, and the insurance policy lasts for your entire life, as long as you pay your premiums on time.
A modified whole life insurance policy also builds cash value as you make each of your payments. Since the initial payments are lower, it can take longer to build cash value with a modified whole life insurance policy than it would with a traditional whole life insurance policy. Once you’ve built up cash value, you can potentially borrow against that value to finance expenses like home repairs.
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From different policy types to comparing premiums, there’s a lot to shopping for life insurance. These tips will guide you through the process.
Most life insurance policies are cheaper when you’re younger. If you shop for coverage when you’re young, you can take advantage of the lower premiums.
Think about why you want life insurance. Certain policies, like whole life insurance, allow you to eventually borrow against the policy’s cash value, which can help fund large expenses. Keep in mind that term life insurance will have an end date, while permanent life insurance will cover you for the rest of your life if you pay premiums.
If you’re on a strict budget, term life insurance often has lower premiums than permanent life insurance policies. Make sure that you can comfortably afford the premiums of the policy you choose.
Take the time to shop around and get life insurance quotes from multiple companies. You can get free life insurance quotes online to be sure you’re getting the best deal.
You can add on many different types of extra benefits, like accidental death or terminal illness riders. These come at an extra cost, so think carefully about which benefits are most important to you.
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When you apply for life insurance, be honest about your health and your health habits. If you lie on your application, the company could charge you a higher premium or even cancel your insurance without refunding your premiums.
If you don’t pay your premiums on time, your insurance could be canceled. Set reminders or set up automated payments to be sure you always pay on time.
Take the time to completely read your policy before signing up for life insurance. Make sure you understand all of the terms, the benefit amount, and what you need to do to keep the policy active. Then, be sure to review your policy regularly so that you’re aware of any changes made. If you experience major life changes, like the birth of a child or retirement, it’s a good idea to make sure that your life insurance policy still meets your needs.
Your beneficiary needs to be aware of your life insurance policy so they can file a claim after your death. Be sure that you share details, like the policy number and insurance provider contact information, with the beneficiary.
Paige Cerulli Paige Cerulli is a freelance content writer and journalist who specializes in personal finance topics. She graduated from Westfield State University and brings more than a decade of professional writing experience to the ConsumerCoverage team. Paige’s work has appeared in outlets including USA Today, Business Insider, and more.
