Finding a life insurance policy that’s right for you is never easy. The entire process can be daunting and confusing, as many industry professionals use unfamiliar terms and insurance jargon that’s difficult to decipher. If you’re just starting your search for the right life insurance policy, here are a few things to look for to ensure you get the perfect coverage for you:
Stepped vs. Level Premiums
The first thing to look at when you’re comparing life insurance policies is the terms of payment. There are two common ways that most people pay premiums for life insurance, and they’re called stepped and level premium policies. If you opt for stepped premiums, your premiums will get higher as you get older. If you’re the type of person who likes to keep checking around for better values and don’t mind switching policies, this is a better option for you, as you’ll pay less in the earlier years of your policy.
On the other hand, level premiums mean you pay exactly the same amount in premiums each year. This is a great option for people who like to set and forget their life insurance policy. Even though you’ll be paying more in the first few years of your policy than someone with a stepped premium policy, you’ll keep paying a consistent amount of money each year, rather than having to increase your payments as you get older.
Advance Benefit Payment
When a person passes away, it’s often up to the family to carry the burden of many immediate costs: funeral and burial concerns, as well as paying for any medical bills that may have been incurred in events leading up to death. That’s a lot of money to spend in a really short amount of time, which is why it might make sense for you to find a life insurance policy with an advance benefit payment.
An advance benefit payment allows for your family to get a lump sum payment immediately following your death so that they can cover any of those big expenses without having to pay out of their own pockets. This often makes it easier on grieving families who are just working to get through a tough time.
Benefit Indexation
Most insurance policies are in business for decades. If you buy your insurance policy at the age of 30, you’ll have that policy for more than three decades, at least. Because of this, it’s important to take factors like inflation into consideration when you’re looking for life insurance policies. Benefit indexation (sometimes called cover indexation) works to take the costs of inflation into account and adjust your coverage to reflect those concerns. Policies with benefit indexation ensure that you always get the amount of coverage you were looking for when you purchased the policy. These policies counteract the influence of inflation.
Premium Adjustments
In the 30 or more years that you have a life insurance policy, it’s pretty likely that something in your life will change. Whether you have another child, change jobs, get a promotion, or get married, these are all major life changes that can have a huge effect on what you’re looking for in a life insurance policy. It’s important to make sure that you can adjust your life insurance coverage accordingly.
Some life insurance policies will include clauses that explain exactly how to make adjustments to your policy, or that will make it possible to adjust your premiums as necessary, but not all of them include this. At the very least, it’s important to talk to your insurance provider or financial advisor about what to do in the event of a major life change. Ensure you have the power to make those premium changes when necessary so that you always have the coverage you need based on your current lifestyle.
Exclusions
It’s always important to know what’s covered in your insurance policy, but when you’re shopping around, you’ll also want to take a close look at what’s excluded. The worst thing that could happen would be to have your claim rejected by a blanket exclusion you just didn’t know about. Be sure to read through each policy thoroughly to ensure you’re covered in a way that’s best for you. By reading exclusions, you’ll know when it’s necessary to purchase additional coverage, or at least talk to your insurance provider for more clarification.
Quality of the provider
Finally, before you agree to purchase any life insurance policy, be sure you’ve checked out the policy provider as well. Make sure you’re purchasing a policy from an insurance provider who is reputable and well-known. If you’re unsure about the legitimacy of a provider, it’s probably in your best interest to keep looking, but at the very least, talk to your financial advisor. They’ll know which providers are reputable, and which might not have the best track record.
If it’s your first time thinking about life insurance, the advisors at Doyle & Ogden are here to help. We’ve been matching West Michigan clients with the best coverage for decades now, and we’re confident that we can find you the policy that best suits your needs. We partner with all the major life insurance providers in the area and can find you better coverage, for the best price. Give our office a call at 616-949-9000, or request a free quote online for the right life insurance policy for you today.
