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Three Secrets to Choosing the Right Life Insurance Policy | XL Financial Blog

Three Secrets to Choosing the Right Life Insurance Policy

Posted on 18. Aug, 2015 by in Insurance

Life insurance is an essential component in planning for financial security. Choosing the right policy can be intimidating and complicated, so doing plenty of research beforehand will help you select the plan that best fits your needs. Here are a few things to consider before you purchase coverage.

Know Thyself

Do not fall into the trap of allowing anyone else to tell you the amount of protection you require. First, consult the person who understands your financial circumstances best: you. Begin by assessing your debt, the amount you will need to replace about a year of income, and your anticipated funeral expenses. Sales representatives will typically be trained to recommend the largest policy, and it is important for you to have an accurate picture of your needs before you consult with a professional. If you have a large amount of debt with high interest, choosing a more conservative policy at first may be preferable. Your age, marital status, and current health should also be taken into account.

Understand Your Options

There are two main types of life insurance: term, and permanent (whole life). Profits for insurance companies are generally increased when they sell you the latter, so prepare ahead-of-time to hear a sales pitch for this kind of policy. Term insurance will usually provide enough protection for most of your financial needs and any debt that must be settled. In addition, these policies can often be altered in the future if you need more coverage.

Work With a Broker

Unlike working directly with a firm, collaborating with an independent broker will provide access to a variety of plans. Seek referrals before selecting your broker, and make sure that they listen carefully and understand your individual needs.

Peace of Mind

Having an adequate life insurance policy in place will protect your family and give you peace of mind. Take your time, assess your needs, and select a policy that will give you suitable coverage while allowing you to pursue other financial goals.

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