Buying Life Insurance for The First Time

Consider what you have in place to support loved ones who depend on you financially. This would include an emergency fund, retirement savings and any life insurance coverage through work. You might find that you’re not as prepared for the unexpected as you thought.

They tend to think only about how much would be needed to pay off their major debt, such as a mortgage. However, they should consider how much more would be needed to help a spouse or partner pay bills, support children, pay for college tuition or cover any other long-term needs

 A term life policy will provide coverage for a certain period of time—typically 10, 15, 20 or 30 years. It can be an affordable way to get coverage until you reach a certain financial milestone

 A permanent life insurance provides lifelong coverage, which is why it’s more expensive than term life insurance. It’s also more expensive because it builds cash value. That cash can be used for whatever you want—to cover emergencies, supplement retirement income, help pay for long-term care or even cover the policy’s premiums.

The two key factors life insurance companies consider when determining the rate you pay for coverage are health and age. The younger you are when you buy life insurance, the cheaper it tends to be. That’s because you tend to be healthier when you’re younger, and therefore less risky to insure.

The rate you pay for life insurance is important because you want to ensure the premium fits in your budget. If you’re buying a cash value life insurance policy, the policy’s internal costs can be just as important as the premium you pay.

If the underwriting process will take a few weeks or more for the policy you’re buying, you can usually lock in temporary coverage by attaching a check with your first premium payment to your application. This gives you coverage, and peace of mind, while you wait for the application to be processed. Ask your life insurance agent about this option.