iQuanti: Going to a life insurance agent can be intimidating. There is a wide selection of font options available, and choosing the right one is a serious decision for you and your family. But finding the right policy doesn’t have to be a challenge if you know the right questions to ask.
Before you sit down with a life insurance professional, here are five questions you should be prepared to ask.
What type of life insurance policy best suits my financial and personal situation?
There are many types of life insurance policies. But there’s no one better to analyze the noise and make a solid recommendation than a life insurance agent. Depending on your age, marital status, health, and financial goals, an agent can recommend a term or permanent life insurance policy.
Term life insurance policies are often the best for those looking to provide financial protection for a particular goal or period of time. For example, a parent with young children may look to a 20 or 30 year term insurance policy to cover income replacement or education expenses if they unexpectedly die before the children are older. .
Permanent life insurance, which includes whole and universal life insurance, may be a better option for people looking for lifetime coverage. These policies include a death benefit payment in addition to a savings component that can build up a cash value over time.
How much life insurance should I purchase?
A life insurance agent should be able to help you calculate the amount of life insurance you will need. They may ask you how much debt you have and how much you are contributing to the family’s income.
An officer will also likely want to know your financial goals and the intent of the policy. For example, if you want to use life insurance to leave an inheritance, you will likely need a larger policy than if you want one that only covers burial costs.
How much does a life insurance policy cost?
A life insurance agent can help you understand the type of monthly or annual premiums you will need to pay for various policies. Generally, term life insurance policies tend to be less expensive than permanent life insurance policies. This is because some of the money put into a permanent life insurance policy is used to accumulate cash value that can be leveraged later in life.
Can I adjust my life insurance policy in the future?
It is important to understand if you can change your policy if your life or health circumstances change afterwards. For example, if you have a child and want to increase coverage, what does this process look like? Will you be able to add a rider of coverage to your existing policy, or would you need a new policy entirely? Understanding this process in advance means that you can easily plan for changes later.
Are there any policy exclusions?
A life insurance policy exclusion is a circumstance in which beneficiaries would not receive full payment of the death benefit. And since there isn’t a standard exclusion list for all life insurance policies, asking an agent this question is essential.
Exclusions may include hazardous activities, private aviation, illegal activities, etc. It is essential to identify the exclusions before purchasing the policy so that you can plan accordingly if you regularly participate in the exclusions.
The bottom line
Working with a life insurance agent is one of the best ways to make sure you’re getting the right policy at the best price. Before meeting with an agent, be sure to collect all questions, such as those outlined above, and have the life insurance agent answer them fully before applying for a policy. This means you’ll be sure you have the right policy and are clear on how it works.