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A lot of questions can come up when thinking about whether or not to purchase insurance. Therefore, we decided to answer some of the most important questions asked before and after purchasing insurance.

Questions To Ask Before Purchasing Life Insurance

1. HOW MUCH LIFE INSURANCE COVERAGE DO I NEED?

First of all, you will definitely need life insurance if you have dependents to protect and don’t have enough savings. How much? It depends. If you have a benefit plan at work, you have to coordinate that with your insurance needs. You can evaluate this in the short term (up to 5 years) or long term (+5 years). At the minimum, you should be leaving no debts (e.g., covering your mortgage) and providing income to surviving loved ones.

2. SHOULD I HAVE TERM OR WHOLE LIFE INSURANCE (TEMPORARY VS. PERMANENT)?

Term insurance pays a benefit in the event of death of the insured during a specified term (e.g. 10, 20, 100 years, etc). It is cheaper than other types of insurance. However, there is no cash value associated with term life coverage. The cash surrender value (normally used with a life insurance or life annuity contract) is the sum of money an insurance company pays to the policyholder or annuity holder in the event his policy is voluntarily terminated before its maturity. Some term life policies may offer features such as terms for return of premium and the flexibility to convert to whole life insurance. Whole life insurance is a permanent type of insurance(type of universal life insurance). If you choose to cancel whole life, you can cash out the built-up cash surrender value. Universal life insurance allows the cash surrender value to be invested and grow tax-deferred.

3. I’M YOUNG AND HEALTHY, DO I NEED LIFE INSURANCE?

Life insurance is the most practical gift-giving purchase you can make. It is not for you. It is for your loved ones to ensure that they are provided for financially. It is useful in helping pay bills, debts, and funeral expenses after your death. It may be used for wealth accumulation and distribution as part of an overall financial strategy. You are young and healthy. It might be a good idea to apply now to take advantage of your good health and lock in a standard rate in case of illness in the future. In ALL POSSIBILITIES, you will need life insurance – most especially when you start to assume higher financial responsibilities for your dependants in the future.

4. WHAT IF I ALREADY HAVE INSURANCE COVERAGE?

It is advisable to review it on a regular basis even if you already have a life insurance policy. This is to ensure it still meets your current financial situation.

5. HOW CAN I SAVE MONEY WHEN BUYING LIFE INSURANCE?

It is best to buy life insurance ASAP. Premiums for the same amount of coverage increase the older you become. The more you wait, the more you risk developing a health condition that could increase your premium or disqualify you from coverage. If you want permanent life insurance but you’re on a budget, term (or a combination of term and permanent) insurance may offer lower premium payments.

Questions To Ask After Purchasing Life Insurance

1. HOW CAN I PAY MY PREMIUMS?

When buying life insurance from Care Life Insurance, you have many flexible payment options. Monthly automatic secure transfers from a checking account is a popular method. However, credit card or a secure funds transfer directly from your checking or saving account are also available options.

2. CAN I INCREASE MY INSURANCE COVERAGE?

Depending on the type of policy and insurability criteria (e.g. health status) you have, you may be able to increase your coverage within that policy or you may purchase additional policies to increase your coverage.

3. WHAT IS A CONTESTABLE PERIOD?

Most policies have a 2-year contestability period, which means during the first two years after buying life insurance, if it is found your insurance policy was issued under misrepresentation, withholding of information by the insured or the owner, or similar reasons, the insurance company can declare your insurance policy and any associated riders void. If fraud is determined, your insurance policy and any associated riders can be made void at any time. Generally, if your policy is reinstated, the contestable period will start anew from the date of reinstatement.

Post Author: Jerico Esguerra