Many people neglect to even research taking out a life insurance policy, simply because they think these policies are too expensive to fit comfortably into their budget. However, it is still possible to find low cost life insurance. Just do a quick online search and you’ll be amazed by the amount of coverage you can buy for just pennies (or at least nickles) a day. But now I’m going to tell you why blindly rushing ahead and buying one of those policies sold just on the basis of their cost is the wrong thing to do.
First you have to determine whether it is whole life insurance or term life insurance that you are looking for: this is even more important than buying based on the most attractive low cost life insurance quote you can find. A good guide supplying answers to your life insurance questions can help you with this basic decision.
Ask yourself what your needs are. Maybe you’re young, just starting a family. Financial protection for your loved ones in the event of your death is paramount, but if you buy one of those low cost term life insurance policies, then live longer than the duration of the policy, are you aware that you will receive nothing at all for all the premium payments that you made, over decades? Also, have you considered how much harder it will be to get a life insurance policy at that time, in your 50s or 60s? Of course no one can fault you for making provisions for your family, but to buy that cheap coverage you found on the internet or in a direct mailer might very well not address either of these eventualities. There are ways to avoid these outcomes, through convertible or renewable term, but you have to know about them and why they might make sense for you.
On the other hand, maybe you’ve heard that a relatively low cost whole life insurance policy can be thought of and used as an investment for your retirement. You’re attracted by the guaranteed death benefit payout, and the fact that you can often borrow money against the cash value amount that your policy will build up over time. But did you know that most experts, I mean unbiased experts not actively engaged in trying to sell you insurance(!), don’t regard simple whole life insurance as a very good investment? Did you know that whole life has fees that are often undisclosed to the policyholder, which can seriously eat into any cash value appreciation from which the policy is benefiting?
I’m asking these questions about two of the most popular forms of life insurance not to dissuade you from buying either of them. I’m trying to help by pointing out that there’s more to them than meets the eye, and certainly more to your task of finding the right policy for you, than simply looking at price, or rushing to a judgment before you have all the facts. Getting the right variation of a given policy, or getting the right supplemental features won’t necessarily happen even if you go through an agent, unless you ask the right questions and have a general idea about what you do not want.