Did you know that 106 million American adults lack life insurance or sufficient coverage for their families? While no one wants to think about how their death would affect the people they love the most, buying life insurance is a way to ensure your dependents are secure.
You may not know where to begin if you’ve never bought a life insurance policy. This brief guide will get you started and help you assess your needs.
How Much Coverage Do You Need?
Remember that your life insurance policy’s purpose is to take care of your financial dependents after your death and funeral expenses. It’s best to get enough coverage to last your loved ones several years after your death.
The DIME formula can help you calculate how much coverage you should get. It takes the following factors into account:
- D: debt (all loan balances and expected funeral expenses)
- I: income (your annual income multiplied by the number of years dependents need support)
- M: mortgage (the amount left to be paid on your mortgage)
- E: education expenses (tuition for your children)
Even with the help of this formula, you may have questions about how much coverage is best. Speaking to a financial advisor can help you make this critical decision.
What Type of Policy Should You Buy?
There are two types of coverage—term and permanent. Whole and universal life insurance are types of permanent coverage.
Read about all three of these policies below. Then investigate more about them to decide which one suits your needs.
Term Life Insurance
This type of life insurance is usually the cheapest option for young people. It provides coverage for a specific time frame, between ten and thirty years.
The main goal of term life insurance is to support your beneficiaries in the event of your death. The payouts last until the term ends unless the policy is renewable or convertible.
Whole Life Insurance
This permanent life insurance usually provides lifetime coverage. The premiums are fixed, and policyholders pay them for a certain number of years or until their death.
Another benefit of whole life insurance is that it has a cash value. Plus, if it comes from a mutual insurance company, it may receive dividends.
Burial insurance is a type of whole life final expense insurance with lower premiums. It covers the funeral, burial, and other expenses incurred due to your passing. Moreover, burial insurance has no waiting period and covers you as soon as you fill out the application and make the first payment.
Universal Life Insurance
Universal life insurance is another type of permanent coverage and comes in many forms. These policies grow in cash value at a fixed rate or according to the market.
Universal policies are quite flexible and give policyholders many options.
Request Quotes from Different Life Insurance Carriers
Once you know how much coverage you need and which policy you’d like to purchase, reach out to several insurance carriers.
Request quotes and then review each policy. And, don’t forget to look up reviews so you can choose a company with good customer service.
Get Assistance Buying Life Insurance
Buying life insurance isn’t an easy task. It takes time, research, and a lot of consideration of your loved one’s needs. However, you don’t have to do it alone.
Contact us if you need help buying burial insurance for seniors. We would be glad to answer your questions and support you in any way possible!