Tips for Finding Cost-Effective Yet Reliable Life Insurance
When searching for life insurance, it’s essential to strike a balance between affordability and reliability. While you want to find a cost-effective policy, it’s crucial to ensure that it provides the necessary coverage and meets your needs. Here are some tips to help you find a reliable life insurance policy that doesn’t break the bank:
Compare Quotes from Multiple Insurers
One of the most effective ways to find cost-effective life insurance is to compare quotes from multiple insurers. Different providers offer various premiums, and by obtaining quotes from several companies, you can identify the most affordable options available to you. Keep in mind that the lowest price doesn’t always equate to the best value, so be sure to consider the coverage and reputation of the insurer as well.
Consider Term Life Insurance
Term life insurance is generally more affordable compared to whole life insurance. This type of policy provides coverage for a specific period, such as 10, 20, or 30 years. If you’re looking for cost-effectiveness and don’t require coverage for your entire lifetime, term life insurance can be a suitable option. Just make sure to select a term length that aligns with your needs and consider the potential need for renewal or conversion options.
Assess Your Coverage Needs
To find a cost-effective life insurance policy, it’s essential to assess your coverage needs accurately. Consider factors such as outstanding debts, mortgage payments, future education expenses, and income replacement requirements for your beneficiaries. By determining the appropriate amount of coverage you need, you can avoid overpaying for unnecessary benefits or underinsuring yourself. This step ensures you strike the right balance between cost and coverage.
By following these tips, you can navigate the world of life insurance and find a policy that is both cost-effective and reliable. Remember, it’s crucial to consider not only the price but also the coverage, reputation, and customer service of the insurer before making a decision.
To Elaborate…
Video Transcript:
Hi, this is Mike Sheehan with FinancialProf.org. I want to talk a little bit about life insurance pricing. I sit down with a new client, a new potential client, and we get to the budget part of what they can afford or what they want to Pay towards their life policy. It’s not uncommon. The person say, give me the cheapest policy out there.
And I can understand that everybody wants the best value for their money, but is the cheapest life insurance policy, always the best. And I think if you kind of look back and equate that to anything else that you buy, you know, are the cheapest tires for your car is always the best, you know are the cheapest pots and pans that you buy for kids for cooking always the best, you know, there’s different levels of quality.
And, you know, and you’re talking about a product here that’s going to provide for your family when you’re not here, so you want to make sure that it’s going to do what it’s going to do. And that’s again, providing you, providing your heirs, providing your family, providing your wife, providing your children with money so that they can maintain their standard of living, stay in the house that the, that they grew up in or that they’re living in currently, and basically not have to make any financial decisions right away.
That’s the primary purpose of life insurance. Very, very wealthy people have been purchasing life insurance and a lot of life insurance for many, many years. And not to get off on a tangent or on a sidebar, but you know, life insurance proceeds are tax free. So when you pass away, that money comes to you tax free.
So it’s not like a lottery ticket that if you were to win $100,000 lottery ticket, you’re going to pay 30 or 40 percent in taxes. You get $100,000, a million dollar life insurance policy. There are no income state tax due on that. So again, so when you’re purchasing a life insurance policy, you obviously want to get it from an AAA plus rated company.
And those are very easy to find out. You can ask the agent or you can go on a site called A.M. Best, and you can find out the company and you know, there there’s riders on policies. Some riders are automatic. There’s no cost for those riders. Well, I mean, one of the most familiar or most popular riders right now is what’s called a living benefit rider.
What that is is that if you don’t have to die to reap the benefits of that life policy so they will have an option where if you have, if you are critically chronic or terminally ill, that you’ll be able to access a portion of that life policy to cover some of those expenses. prior to your death. So not all policies have those.
So living benefits, there are policies that have return of premium benefits. That means if you outlive the policy, you get 100 percent of your premium back.
All policies will have what’s called a contestability period, which is two years. And this is a point where if you were to pass away within the two years, the insurance company has the right to go in and investigate that death if they so desire.
Certainly something like suicide. If you were to pass, if you were to pass away due to suicide in the first year, that insurance, that insurance policy is not valid. It’s void. So that’s the case across the board. There’s no company that does not have that contestability period. So, you know, again, when you’re looking at an insurance policy, you obviously or an insurance program.
You obviously want something that’s going to fit your budget, but it’s not always the case where the cheapest one is the best. So remember this when you’re having your conversation with your agent. You can always reach out to us at FinancialProf.Org. We’d be happy to talk to you. Again, we deal with 20 to 25 different companies so we can do the shopping for you.
So until next time, make it a great day.
