When you’re ready to get started, take these steps to find the right coverage for you and your family!
Step 1: Get life insurance when you’re young and healthy.
Life insurance costs less when you’re young and healthy. However, this might be the time of your life when you’re not making as much money because you’re in your early earning years.
Consider buying it anyway. According toBusiness Insider, you’ll pay way less at age 25 than you would at age 45. As a female, you may pay on average $18.59 per month at age 25 but the price jumps to $41.75 per month at age 45.
Step 2: Decide whether term or whole life makes more sense for you.
If you need life insurance for a specific amount of time, such as the duration of time you will pay on a mortgage or saving for college, you may want to choose term insurance. Decide whether you want it as an income replacement strategy.
On the other hand, if you want coverage for your full life, you may want to tap into whole life insurance.
Step 3: Add up how much you need.
Put together how much it’ll cost you to replace your income, how much your mortgage costs you, kids’ college expenses and other monthly expenses.
From that, subtract the money you already have in savings or in other investments. Leave out your retirement funds if you think your family will need that for later on. Factor in income replacement over the course of many years.
Does it seem like a lot of money? That’s normal. It’s not unheard of for individuals or families to adopt million-dollar-plus policies.
Step 4: Get a quote and apply.
First, get a quote by answering basic questions about your age, health, tobacco use, family health history, driving record and any risky hobbies you perform.
Next, start a formal application. You’ll apply for a policy type, amount of coverage and policy length for term insurance.
As soon as you submit the application, a life insurance company may ask you to undergo a medical exam.
Step 5: Choose your beneficiary or beneficiaries.
A life insurance beneficiary is the person or people who will receive the death benefit when you die. You can add multiple beneficiaries or contingent beneficiaries on your life insurance policy. Review your beneficiaries every few years or so to make sure that life events, such as the death of a spouse or a divorce, reflect your beneficiary choices.
Step 6: Pay your premiums.
Your life insurance policy stays in force as long as you make your payments. Payment methods may vary depending on the provider. However, the most commonly accepted forms of payment for life insurance include a personal check, cashier’s check or an electronic funds transfer (EFT).
Step 4: Your beneficiaries make a claim after your death.
Life insurance companies won’t automatically know when a loved one has passed away, so your beneficiaries need to make a claim using a death certificate. The insurance company will need a death certificate as proof of a death.
Your loved ones may want to request a few certified copies if they need the death certificate for other companies that may need to know about the death. Your loved ones will need to contact the life insurance company right away and verify that they’ve met all claim requirements.
Life Insurance Can Help in a Crisis
Life insurance can help your loved ones in the wake of your death, but only if you tell them that you have a life insurance policy! Tell your beneficiaries the name of the insurer so they can contact the life insurance company as soon as the unthinkable occurs. They don’t need your login and password for the insurance company — they only need the name of the company so they can contact them.
Again, it’s not pleasant to think about dying and leaving your family to manage on their own. However, buying life insurance could be the best financial gift you can give them.