Five Things to Consider When Buying Family Life Insurance

Buying Family Life InsuranceIt’s no secret that life insurance provides a safety net for families, especially those with children. But before you decide on a policy, it’s important to consider these five factors in order to ensure that you buy the best life insurance for your family’s needs.

Who Should Buy Family Life Insurance?

The answer to this question is simple: Anyone with a family should consider buying life insurance. Whether you have a spouse or children that rely on your income for support, life insurance protects your dependents. In fact, of the 35 million households without life insurance, 40% say that they wouldn’t be able to pay their bills if their main breadwinner passed away, according to Forbes. That’s where family life insurance comes in.

How Much Family Life Insurance Do I Need?
Every family has their own financial situation, so this question is best answered by determining exactly what you need life insurance to do. For instance, will the money be used to pay for funeral costs and outstanding bills? Will your dependents have enough savings to pay for college or retirement costs? Will the insurance be used to pay off a mortgage or to pay estate taxes? The answers to these will questions will help you identify how much your dependents will need.

What Type of Family Life Insurance Should I Buy?
Many people purchase term or whole life insurance. Term life insurance pays your beneficiaries if you pass away within a certain amount of time. For instance, Gerber Life’s Term Life insurance allows you to choose between an initial term of 10, 15, 20 or 30 years. For example, a policy with a 10-year term pays only if you pass away within 10 years, but – at the end of the term – you can choose to renew annually at the premium for your age at that time. Whole life insurance policies cost a bit more and last for the life of the insured. The Whole Life Plan from Gerber Life builds cash value that can be borrowed against, so long as premiums are paid.

Can I Convert My Policy?
Some term life insurance plans allow you to convert to a whole life insurance plan. This offers flexibility in case you change your mind down the road. Be sure to read your policy thoroughly; if there’s anything you don’t understand, ask your life insurance carrier to explain.

How Do I Choose a Carrier?
When choosing a life insurance carrier, it’s important to do your homework. Shop around until you find the best policy for your family’s needs. Consider factors such as the quality of a company’s customer service – as evidenced by customer ratings – and longevity, as well as premium costs. Gerber Life offers online reviews of both its term and whole life insurance plans.

Once you’ve found a carrier you feel comfortable with, don’t be afraid to ask questions. After all, when it comes to buying family life insurance, the more information you have, the better a decision you will make.

 

Sources:
1. http://www.farmers.com/10_03_11_SixQuestions.html
2. http://www.investopedia.com/articles/pf/08/term_life.asp#axzz1yYzTsvrR
3. http://www.forbes.com/sites/moneywisewomen/2011/07/11/1195/
4. http://www.forbes.com/2010/12/16/life-insurance-shopping-personal-finance-term-permanent.html

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