When was the last time you checked your life insurance coverage? If you can’t remember, now is a good time to review your policy.
September is Life Insurance Awareness Month, a campaign sponsored by industry leaders to educate consumers about the importance of life insurance in financial planning. Life insurance is a relatively low monthly cost that provides financial security for those who depend on your income, such as your spouse or children.
Take a moment this month to analyze your current life insurance coverage or shop around for a new policy. You can find out all about life insurance and find the policy that’s right for you on Credible.
3 questions to ask about your current life insurance policy
If you think your life insurance policy isn’t good enough, you might be right. More than 100 million Americans have a gap in life insurance coverage, according to estimates by the non-profit professional association LIMRA. Here are some questions to ask yourself to see if your life insurance plan is right for you:
- Has my situation changed since I took out the contract? For example, if you have had children or if your state of health has changed, let your insurer know. This ensures that your beneficiaries will not have any problems accessing the death benefit.
- How much is my death benefit? The life insurance payment will essentially have to replace your income so that your loved ones are financially secure in the event of premature death. Some financial experts recommend purchasing a policy worth 10 to 15 times your annual income to ensure no life insurance coverage gap.
- How much does my policy cost? Life insurance premiums depend on several factors, including the size and duration of the policy. Compare your premium to the average cost of life insurance to make sure you’re not overpaying.
If you are not happy with your life insurance policy, you are not stuck with it forever. You can shop around for a new policy if you want, for example, a higher death benefit or a lower premium. Browse life insurance plans across multiple insurers in one place using Credible’s online marketplace.
How to buy life insurance
More than a third (36%) of Americans plan to purchase life insurance this year, including nearly half (48%) of millennials, according to a recent LIMRA study. But while many people are considering purchasing life insurance, some may not be sure where to start the process. Here’s how to get started:
You can initiate the process by visiting Credible for get free life insurance quotes in a few minutes.
Determine the coverage you need
Your life insurance payment, or death benefit, should be large enough to replace your income while your dependents deal with the consequences of your death. Ideally, the death benefit will help you pay for your funeral expenses and unpaid debts, as well as cover living expenses for a specified period.
The amount of coverage you need depends on how much you earn, how much debt you have (such as a mortgage or student loan), how many dependents you have dependents, and any other financial obligations you have. you could have. Typically, your life insurance amount will need to be 10 to 15 times your annual income.
Choose between term life insurance and whole life insurance
There are two basic types of life insurance, term and whole. Term life insurance is the traditional type of insurance in which you pay a monthly premium for a set period of time, typically 10 to 30 years. If you die before the term expires, your beneficiaries receive payment. The average premium for term life insurance for a healthy young insured is around $ 25 to $ 35 per month, according to data from Policygenius.
Whole life insurance, on the other hand, does not have a fixed expiration date. It extends over the life of an insured and has a guaranteed cash value, which makes it a more expensive insurance option. Whole life insurance premiums can cost anywhere from $ 300 to $ 3,000 or more per month, depending on the size of the policy and the age of the policy holder.
You can compare whole life and term insurance quotes on Credible, so you can see which option best suits your needs.
Take a tour of several insurance companies
Life insurance companies have criteria for determining who qualifies for a policy and how much that policy costs. Since premiums can vary from company to company, it is important to compare the plans of several life insurers.
Fortunately, you don’t have to call each business individually to see which one is right for you. Visit Credible at get free life insurance quotes through multiple insurers, so you know you’re getting a good rate.
Have a finance-related question, but don’t know who to ask? Email the Credible Money Expert at [email protected] and your question could be answered by Credible in our Money Expert column.