There are many different life insurance packages out in the market, and it’s easy to become overwhelmed with the number of options available to you. Some options might even seem completely foreign to you, leaving you without a clue on how to get started in selection the plan right for you. Although the complexities of each life insurance policy may be different, there are a few basic principles of life insurance that remains the same. Investing in life insurance is one of the most important financial decisions you’ll make in your lifetime. Not only does it protect the loved one you’ll leave behind, but it can be a useful tool before then as well. While there are a number of factors to take into consideration when investing in life insurance, we’ll get you started on the five primary things to consider.

Age

One of the most important components in determining which life insurance product you choose and which ones are available to you, is your age. Generally speaking, the younger you are, the more options you’ll have to choose from. For some life insurance options such as basic term life insurance, your eligibility to purchase ends at about the age of 60.

Gender

One of the most important components in determining which life insurance product you choose and which ones are available to you, is your age. Generally speaking, the younger you are, the more options you’ll have to choose from. For some life insurance options such as basic term life insurance, your eligibility to purchase ends at about the age of 60.

Current state of your health

Most life insurance policies require either a physical exam or answering medical questions in order to determine your current state of health. Needless to say, the healthier you are, the less expensive your insurance premium will be.
Keep in mind, smoking is a big, negative determining factor when it comes to the price of your life insurance. If you claim to smoke cigarette or consume nicotine, you can expect costs to be significantly higher.

Occupation

Another thing that factors into life insurance premiums are occupations that are higher risk. Important and heroic jobs such as firefighters, construction workers, police officers are also higher risk. That’s why individuals with these careers can run into higher costs and more challenges obtaining a life insurance policy. Your line of work becomes operative during the application press, consider the fact that it impacts your overall health and safety. Those in these positions are often putting their lives on the line every day. Additionally, some roles come with added health risks over a longer period of time. Mining workers, for example may be at a higher risk for eventually developing respiratory conditions.

Lifestyle

Your lifestyle is also a determining factor into your life insurance as well, especially in regards to lifestyle choices that could affect your health and safety. This includes things like your driving record, criminal background, financial history, etc. If you have a history of risky lifestyle activities, that can have an impact on your access and rates for life insurance. However, keep in mind that these factors are relative. In other words, a single speeding ticket won’t automatically disqualify you from being able to get life insurance, though a pattern of reckless driving potentially could.

Current financial position

You need an accurate image of your financial health before you can determine what type of life insurance you need.
Take into consideration what you have in place to support loved ones who depend on you financially. This can include an emergency funds, retirement savings, workplace coverage, etc. You might find that you are not quite as prepared for the unexpected as you thought.
Consider working with a financial planner to discuss what needs you should cover with life insurance, whether that would be mortgage, children who need to be supported, a small business to protect, or a legacy you want to leave behind. If you’re on a strict budget, you may want to consider term life insurance. Term life insurance, sometimes known as “started life insurance” allows your to purchase a policy that is convenient and fits your budget. Though some needs analysis may indicate that you should have more coverage, a term insurance policy is still a good place to start.

How much coverage you need

Financial experts claim most people underestimate the amount of life insurance they need. “People undervalue themselves all the time,” claims Thomas O’Connell, president of International Financial Advisory Group in Parsippany, New Jersey. “If your employer paid you $5 million upfront, you’d look at the money differently. You would protect that money differently,” he tells US News. In other words, you can never have too much coverage. One general rule of thumb is to secure a policy with a death benefit equal to ten times the amount of your annual salary. Keep in mind, you may need to have more or less than that amount, depending on your own situation and financial goals. A financial planner or a George Agency Insurance Agent will be able to help you come up with an accurate figure best for you.

Duration of coverage needed

Some people may be interested in a policy that offers protection for a certain period of time. For example, you may have purchased a home on a 30-year mortgage and then decide you are interested in securing a life insurance plan. In the case that one of your biggest concerns is ensuring your mortgage balance will be resolved after your passing, then a 30-year term life insurance policy might be ideal for you. On the other hand, if you want to have protection in place 40+ years from now, then a permanent life insurance plan would be better suited to your needs.

Let us know if you have questions or concerns. We’ll do what we can to get you covered. Whether you’d like to help your family replace lost income, plan for college, or leave a legacy for future generations, The George Agency has options to fit your needs and budget.