10 Useful Tips for First-time Life Insurance Buyers

Life insurance acts as a financial safety net for your dear ones once you pass away. If you’re purchasing a plan for the first time, term life is one option to consider. It provides coverage for a fixed duration, such as 10-30 years. You could also select a whole life policy for lifelong protection provided you keep paying regular premiums.

How Can You Get Benefit from Life Insurance?

A breadwinner’s death doesn’t have to leave their family struggling to make their ends meet. With a life insurance policy, you can secure your loved one’s financial future. These policies can cover your family’s living expenses and any major debts that you may leave behind. Specific items the policy can pay for include:

  • Your mortgage
  • Your kids’ college tuition
  • Your final expenses, including burial
  • Steady income for your family for several years

Tips for First-time Life Insurance Buyers

If you are looking for life insurance in NY, here are a few tips that can help you while making a purchase:

  1. Determine your financial health

    With the help of a financial planner, assess the resources available to support your family. Do you have an emergency fund or employer-sponsored life insurance coverage? Also, include your retirement savings in this assessment.

  2. Calculate your coverage requirements

    Depending on circumstances, your annual salary multiplied by 10 may be a reasonable death benefit to adequately protect your family for years to come. You should base your coverage estimate on long-term priorities like mortgages, spousal and child support, or college tuition.

  3. Select a type of life insurance policy

    You can purchase term life insurance for a fixed number of years until you accomplish a financial goal like paying off your mortgage. For a plan with an interest-accruing cash component, you may choose permanent life insurance. You can use the cash during an emergency or to cover long-term care.

  4. Consider your life insurance costs

    If you buy life insurance while you’re younger and healthier, your premium rate will be lower as you’re less risky to cover. However, your premium rate is higher when you select a larger death benefit.

  5. Do some comparison shopping

    Costs of life insurance plans for first-time buyers vary widely. To maximize your family’s financial protection at a reasonable rate, you should get quotes from multiple providers.

  6. Think beyond the premium

    You should always select the right premium rate for your budget. However, there are other important cost factors. If you’re purchasing indexed universal life insurance, watch out for uncertainties over premiums or market returns.

  7. Provide adequate information when applying

    The details you fill in your life insurance application form will determine your premium rate. The questionnaire covers your personal information, such as:

    • Physical and mental health
    • Family medical history
    • Weight
    • Driving record
  8. Provide accurate information

    Answer all questions correctly when applying for life insurance, as your insurer will crosscheck everything with third-party sources like medical or public records. Also, a medical exam may be required.

  9. No-exam life insurance is an option

    With a simplified issue policy, you’ll have to answer a few questions without any exam (you’ll pay more for this benefit). Guaranteed issue life insurance guarantees coverage with neither exams nor health questions.

  10. Get temporary coverage early

    Your coverage can start before completion of the underwriting process if you pay your first premium along with your application. Ask your life insurance agent if this option is available.

    Choosing life insurance plans for first-time buyers can be complicated, but our experts at Premier Risk, LLC are here to help. We are happy to demystify your coverage options to help you select the best. Contact us today to learn more!

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