Shopping for life insurance? Here’s what to know

Choosing a life insurance policy might feel a little overwhelming, but with the right plan of attack and a solid understanding of life insurance basics, you too can rest easy knowing your loved ones will be financially stable when you pass away.

Here are our top 5 tips for shopping for life insurance

1. You’re never too young to think about life insurance

Still a few decades away from retirement? Good. You’ll have plenty of amazing deals on life insurance to choose from.

That’s because premiums get higher as you get older. Purchasing life insurance when you’re still young and healthy is the best way to make sure you get the best coverage at the lowest price.

Generally, you’ll want to purchase a life insurance policy once you have people in your life who depend on your financially, like a spouse or child. You’ll have to name these people as your beneficiaries on your insurance plan.

2. Decide if you want term or permanent life insurance right away

There are two basic types of life insurance policies: Term life insurance or permanent life insurance.

Term life insurance is active for a set period of time and does not accumulate cash value. Your beneficiaries will receive the death benefit outlined in your plan if you die within the policy term. If your term expires before you die, you can purchase another life insurance policy.

Permanent life insurance offers lifelong coverage and also includes a savings component that allows you to grow your money and even borrow from it if you need to. These policies are typically more expensive than term life policies.

It should be fairly easy to decide which type of life insurance policy is best for you. If you’re able to focus on one type of life insurance, your shopping experience will be much easier than trying to compare rates for both types of policies.

3. See if you already have life insurance from an employer or labor organization

We know you’re excited to get some life insurance, but before you dive in and start asking for quotes from different insurance providers, make sure you don’t already have coverage.

Check with your employer or any professional groups you belong to in case they have group life insurance policies.

It’s quite possible that you already have life insurance and haven’t realized it, so you may just need to purchase supplemental group life insurance.

4. Focus on finding a policy that covers your debt first

When we die, the last thing we want is to leave our loved ones with a financial burden.

If you have a mortgage, personal loans, or other outstanding debt, be sure that your life insurance policy is large enough to cover those expenses. From there, you can decide if you want to purchase additional coverage. Consult a financial advisor early on to understand what your future financial situation could look like.

5. Get quotes from a few providers before choosing a policy

Most life insurance providers offer quotes right on their websites.

This can be very convenient for comparing general details about a plan to find one that suits your needs. You’ll want to make sure you can afford the monthly premium and any other expenses that come with the plan before committing.