When it comes to life insurance, you want to have a lot of things working in your favor. One of them is to get the best term life insurance rates. Another thing is to have the type of life insurance policy that will work best for you and your loved ones. So here is what you need to know about how to tailor your life insurance policy to fit your life, and be an important part of your financial planning;
Get the amount of life insurance coverage that works for your life
Generally speaking, financial planning experts recommend that you get the most life insurance you can afford right now. However, you may find that this amount can change over time. For example, if you have no children now, and you are single, you may not need as much life insurance coverage as somebody who is married and has four children. You have several choices – you can lock in more coverage now so that you are prepared for future financial obligations, or you can add to your coverage later, as time goes on. Keep in mind, though, that as you age, you generally could pay more on new life insurance coverage, which is why those financial planners recommend that you get the most coverage now that you can afford.
The amount of coverage can vary when it comes to your life insurance. You can get a small life insurance policy – one that is just enough to pay for your final expenses – or one that is more expensive, but will have a bigger payoff. It all depends upon your individual needs.
Think about the length of your term life insurance policy
Some people have term life insurance as a safeguard until they are self-insured. For example, if they were to pass away when they were young, they may end up saddling their spouse with a horrendous mortgage. However, if they are older, and have paid off their mortgage and have a lot of money in the bank, they do not need the term life insurance coverage that they once did. If you are in your 50s, it may make more sense to have a five or ten year life insurance policy that you can afford as opposed to a thirty year life insurance policy that can be cost prohibitive to you.
So one of the things you can tailor when it comes to life insurance is the length of the policy. It may make good financial sense if you are young to get a longer length of a policy, to lock in the rates.
Think about who want to have as your beneficiary
You can have an individual person or persons be your beneficiary, a trust set up as the beneficiary, a charity be the beneficiary, or you can have the proceeds go to your estate. You could have a lot of flexibility as to who you have as your beneficiary, especially if you are unmarried (in community property states, your spouse would automatically inherit your estate unless they sing a waiver for you to name somebody else as the beneficiary.) Other than that, though, you could have some flexibility. You can pick multiple people, and designate the percentage each person could have of your estate. You can also pick a beneficiary to step in if your listed beneficiaries were to pass away.
In summary, there are many ways you can tailor your term life insurance rates. To learn more tips about finding the best term life insurance rates, visit Best Life Insurance Deals.
Lisa Swan writes on a variety of life insurance topics.