Don’t get overwhelmed choosing life insurance. Here’s what you need to know to make the right choice for your family.
You’ve probably heard of choice overload. You’ve almost certainly experienced it. You walk into the grocery store to buy laundry detergent and feel nearly paralyzed. Do you get the all-purpose detergent? The one with bleach or without? Is the liquid better than the powder? What about pods? High-efficiency? And which of the dozen or so brands is the best bargain?
So if buying the right detergent is so hard, how would you even begin choosing life insurance? There’s some good news, as it turns out. Choosing life insurance is a far more significant decision than choosing laundry detergent, but while most of us probably won’t dig into many details about laundry detergent, we do tend to research our larger life choices.
You get an inspection before you buy a home. You look at online reviews before you book your vacation hotel room. When you buy a car, you read reviews and shop around. It’s all about narrowing your choices and feeling knowledgeable enough to be confident. It’s the same with life insurance. It can seem like an impossible choice, but once you get some facts under your belt, the decision gets a lot easier.
Choosing Life Insurance:
What you need to know to make a smart choice.
Definitions are a good starting point since there are a few kinds of life insurance policies. The three most common are whole life insurance, term life insurance, and universal life insurance.
- Whole Life Insurance: A whole life policy is straightforward. When you buy a policy, your premium remains steady, the policy accumulates cash value, you get a guaranteed death benefit, and the policy remains in effect for your lifetime.
- Term Life Insurance: A term life policy offers coverage for a certain period—usually between 10 and 30 years. While term life policies don’t accumulate cash value, they are ideal for young families as a policy that will help replace a parent’s income in the event of their death.
- Universal Life Insurance: A universal life policy offers guaranteed benefits and cash accumulation and also offers flexible payments and benefit options.
Any insurance company that sells life insurance should offer these three options, at a minimum, but that doesn’t narrow the options down very much! There are hundreds of companies to choose from. That’s why choosing life insurance is not just about picking the right policy but is also about deciding on the right insurance company. Here are a few ways to make the choice easier.
What to Look For in an Insurance Company
1. Choose a company that can meet their financial obligations. You want an insurance company that can pay out the benefits you’ve paid for. A.M. Best is an excellent source for checking the financial health of an insurance company. Bonus: Pekin Insurance is rated A (Excellent)!
2. Excellent customer service is vitally important. Most people don’t think much about life insurance after they purchase a policy, but the fact is that your family will be interacting with your insurance company at a tough time. You want to know that the insurance company they have to talk to is understanding and helpful.
3. Know how much you need. One of the primary reasons for a life insurance policy is giving your family the ability to carry on without your income. That’s going to vary depending on how large your family is or how old you and your children are. Many financial planners recommend five years' worth of your salary as a minimum.
4. Choose a flexible policy. We all have different needs, and a life insurance policy should be flexible enough to meet those needs. Pekin Life Insurance Company offers a variety of policy enhancements so you can get the coverage that best suits your situation.
5. Good communication is as essential as good customer service. When you’re choosing life insurance, make sure you choose a company that knows how to communicate with you. You don’t want to end up with surprise fees or random exclusions in your policy.
At Pekin Insurance, we know choosing life insurance is a big commitment. We’re here to make it as easy as possible for you to get the coverage you and your family need. Call your local Pekin Insurance agent to learn more.