Tips on buying Life Insurance

Most people don't like to talk about Life Insurance. They feel invincible, like nothing will happen to them. What they need to remember is that if something does happen. Life moves on. The purpose of Life Insurance is to protect their immediate family or beneficiaries who are still here. If your family is depending on your income every month when you are alive then isn't it fair to say they will depend on it every month if tragedy strikes. Talk to your family and your insurance advisor about your coverage and make sure it is enough if something happens unexpectedly. Follow these tips:

1. Don't depend on employer insurance

It can be easy to choose a policy at work that is deducted from your paycheck. Buy those policies can expire at retirement or if you leave for another job. What if your new employer does not provide Insurance. You might also have health problems that would prevent you from qualifying for a new policy.

2. Understand your needs

Sit down with your family and a trusted advisor and walk thru the steps to find out how much Life Insurance you really need. One common rule of thumb is 15 times your annual salary. This can be altered if you depending on your circumstances. If you have more dependents or debt the more your need will be.

3. Understand the difference between Term and Whole Life.

Term insurance is for a certain time period and should cover your temporary needs like a mortgage or until your kids are out of the house. Whole Life is more for permanent needs like funeral expenses or gifts to a charity. Knowing the difference can help you make an informed decision on what kind of policy to purchase.

4. Recognize that insurance is for protection and not investing.

Term insurance provides protection only, without a savings component. Whole life policies have a savings component and are much more expensive. Ask your advisor which might suit your family.

5. Take advantage of your 30 day free look.

You have 30 days to look at the policy and understand it. If you are not satisfied with it cancel the policy and get your premium back.