NEW YORK – April 8, 2022 – (Newswire.com)
iQuanti: Life insurance can be a smart choice if you want to ensure that your loved ones will be financially supported after your death. In the event of death, your beneficiaries may receive a death benefit that can help them replace your income and pay off their debts. If you’ve decided to purchase a life insurance policy, it’s important to evaluate several aspects of each policy and consider your own financial situation. Let’s dive deeper into four factors to consider when looking for a life insurance quote that works for you and your loved ones.
1. Consider the coverage you need
The first factor to consider is the amount of death benefit you need. When calculating how much life insurance you need, a rule of thumb is that the death benefit should be seven to ten times your current income. But the amount that is right for you may also depend on the number of beneficiaries you have. For example, if you have a spouse but do not plan to have children or your children are independent adults, you may be able to choose a lower death benefit. On the other hand, if your children haven’t grown up yet, you should consider getting a higher death benefit to ensure they’re covered until they’re out of the home.
2. Consider how long you want coverage
Term life insurance has a fixed term of 10 to 30 years. If you survive the term of the contract, you will need to purchase a renewable policy or purchase a new policy when the existing policy expires. Term life insurance may be suitable for those who only need coverage for a specific period. For example, a term life insurance policy can be useful if you have young children and want to provide them with additional financial protection until they are adults.
On the other hand, permanent life insurance offers guaranteed coverage for life as long as you pay your premiums. This can make permanent life insurance a good choice for policyholders who want lifetime coverage and the ability to provide financial support after death.
3. Compare costs
Life insurance policies require you to pay monthly premiums to maintain coverage. Many factors affect premiums. For example, you will likely pay higher premiums for a higher death benefit. Premiums also vary according to the type of policy selected as well as between different carriers.
For example, term life insurance premiums are often more affordable than many permanent life insurance premiums. Depending on your budget, a term life insurance policy may be a better choice. But keep in mind that permanent life insurance policies provide coverage for life, while term life insurance policies will only last for a set period of time.
If you want to pay affordable premiums and enjoy lifetime coverage, you might want to consider final expense insurance. This type of permanent life insurance policy covers end-of-life costs and comes with lower premiums since the death benefit is smaller.
4. Consider your financial needs
Permanent life insurance policies have a cash value growth component. A portion of every premium you pay will go towards your cash value, which earns tax-deferred interest. And depending on the type of permanent life insurance policy you have, you may be able to withdraw or borrow cash value to access those funds while you’re still alive.
This component can help you build wealth and an accessible nest egg in your lifetime.
Term life insurance, on the other hand, has no cash value. This type of policy may work best for those looking for a simple policy with a death benefit.
The bottom line
When getting life insurance quotes, there are several factors you need to consider in order to make the right choice for you and your family. It is wise to weigh your coverage needs against policy costs and determine what your financial needs are. Take the time to evaluate each factor, then compare insurance quotes from multiple insurers to help you get a policy with great coverage at the right price.
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