Life insurance can be a helpful tool to guarantee a degree of financial stability for your loved ones long after you have passed away.  There are tons of life insurance policies to choose from and while this does add a degree of flexibility, it also makes picking the right plan much harder

So, to take the stress out of sorting and sifting through various life insurance plans, we’ve prepared this quick guide.  In addition to step-by-step policy selection tips, we’ll also provide various resources related to insurance products and finances.

Steps For Choosing Life Insurance

Identify your reason for purchasing life insurance

Depending on your needs and goals, you’ll end up with either a term life insurance plan or a permanent life insurance plan.  Both forms of insurance have their benefits and inherent drawbacks.

Term life insurance policies are an affordable way to ensure that your family will be financially set for a certain number of years after your passing.  Since most term policies range from 10 to 30 years, you can choose a policy that covers you during your critical moments.

On the other hand, permanent policies allow you to invest a greater sum of money along with the freedom to utilize it for important purchases.  This form of life insurance is better suited to those who wish to prepare for particularly large expenses such as school or marriage.

Calculate the coverage that you need

With your goals identified, the next step is to calculate the amount of coverage you’d like to receive. This value depends entirely on your preferences, but a widely accepted rule of thumb is to seek coverage that is 10 to 15 times your annual salary.

For a more accurate measure of coverage, you can take into account your family’s average annual expenses and multiply them by the number of years needed to find alternative sources of income.

It may also help to factor in any outstanding debts you may have in the event of an untimely death.  

Compare the policies available to you

To ensure a level of diversity with your choices, experts recommend comparing policies that meet your coverage needs and insurance goals.  In doing this, you’ll be able to identify specific differences among your policies.

Certain plans may offer extra features such as additional compensation for deaths resulting from accidents.  Other plans also take into account financial hurdles like permanent disabilities, terminal illnesses, and critical medical conditions.

By identifying these subtle differences, you can get the most out of your chosen policy and maximize your investment.

If this all seems like a bit too much work, enlisting the help of a capable insurance broker can definitely make things easier.  A broker can take the time to analyze your specific needs and recommend policies that suit you best.

Now that we’ve covered the basics of policy selection, we hope you’ll have an easier time selecting a life insurance plan.