Life insurance can be confusing at times and who can blame you, from getting bombarded by life insurance ads on social media, conflicting information and everyone inserting their opinion of what is the BEST coverage, it can be overwhelming and leave you with more questions than answers.
What kind of life insurance should I buy? How long of a term should I buy for? How much coverage do I need? Should I buy Term Life or Whole Life? What is Mortgage Protection insurance and is it wise to buy it?
There are a TON of life insurance products on the market and all of them boil down to two types of coverage, Term = A fixed cost product for a face amount and Time Period and Permanent life = A policy paid for a period of time with coverage that does expire. (This is a complex insurance product and should be WELL explained before purchasing) We do not take a position here at EIS as to what coverage is wrong or right, however in out experience Term Life is a much more cost effective solution for those that are looking to get life insurance in place.
So here are 5 ways that you can win, when it comes to California Term Life Insurance:
1 – Purchase the proper amount of coverage that you need, Today.
Insurance coverage is meant to bridge the gap between uninsured, and self insured, we recommend selecting 10-12 times your annual income of Life Insurance Coverage It is also recommended that you review your insurance needs every few years and if the need increases, you can stack or add an additional policy to meet the need. It is also recommended that you purchase coverage for both you and your spouse, working or not, it is estimated to cost in excess of 100,000 a year to replace the tasks provided by a stay at home mom.
Pro-Tip: Do not factor in any life insurance provided by your employer, should the dynamics of your job change, you dont want to scramble to replace lost coverage.
2. Do not wait too long to get coverage in place.
Waiting too long to secure life insurance not only leaves your family vulnerable to an unexpected passing but it also increases the cost of the coverage as you age. There is an old saying, term life insurance was never as cheap as it was yesterday. Listen, we get it, everyone thinks they are invincible and it will “Never happen to me” but that is not reality. Inquire today to see what the rates look like for your situation, you might be surprised.
3. Select the proper length of coverage to meet your financial goals.
Again, the goal of insurance is to bridge the gap between uninsured and self insured. We recommend extending coverage for as long as possible while meeting your budgeting requirements, In your 20s and early 30s, you should be looking at a minimum of a 30 year term at your current face amount needs, as the need increases, having children, buying a home, increase in income, you can look at stacking coverage as needed.
4. Be cognizant of riders, additional “perks” and specialty polices.
Insurance companies offer a lot of bells and whistles when it comes to life insurance, riders, benefits and specialty insurance policies such as mortgage protection to name a few. We recommend a cost vs reward approach in deciding if these are right for you. Remember, the role of life insurance is simply to replace lost income in the event of a loss of life, weighing your life insurance policies down with extra costs may not be beneficial compared to other financial options.
5. Remain proactive with your life insurance as life changes occur.
The worse thing that many people do when it comes to insurance is fail to take an active role in the process. Your insurance agent or financial advisor can remind you of the need to review, but ultimately the success that you have with your life insurance rest in your hands. Reviewing Life insurance should happen at least every 36 months, or immediately upon a life changing event, having a baby, new home, a raise or inheritance are all reasons to reexamine your life insurance needs.
We hope that this helps in your search for a starting place for securing life insurance, the best advice we can give is JUST START, make an appointment to speak with a independent insurance agent about your needs and allow them to give you some real world solutions, the process is much easier and less evasive than many believe and you might be pleasantly surprised in what you find.
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