Most of you may get overwhelmed by questions or concerns when it comes to buying life insurance. This article will try to answer some of those questions and concerns and try to make the process of buying life insurance easy for you. The first question that pops up in everyone mind is what’s the best age to buy life insurance? The golden rule is the younger you are, the lower your life insurance premiums will be. Why? It’s simple. When you are in your 20’s or 30’s, your risk of dying is lower than if you were in your 50′s or 60′s. The biggest advantage of buying life insurance at a younger age is that you can lock in a lower premium. Another common concern is the medical examination. The truth is for must most life insurance policies you will be required to take a medical exam at the time of application. The only exception is when you are just purchasing a policy from a group health insurance or group life insurance plan. What does the insurance company do with the results of your medical exam? The results of your medical exam play a very important role in deciding the cost of your life insurance. Based on the results, you are assigned to a risk category. If you have been assigned to a lower risk category, your cost will be low. Similarly if you have been assigned to a higher risk category, your cost will also be high. Your height, weight, health and whether or not you smoke or use alcohol are all taken into account. Your insurance agent will be is a position to explain why you have been assigned to a particular risk category.
One major concern for most of us is how many life insurance policies one must have. Here the golden rule is more than one policy is never too much. There are different kinds of life insurance policies – term life, whole life, mortgage life, universal life, etc. Each has its own benefits. Sometimes, you may buy a whole life insurance policy, but it might not meet your short term needs. You may then have to purchase a term life insurance policy to meet your short term needs. Life insurance policy is an investment. Based on your short term and long term requirements, you can buy the required number of policies. Most of us think that only our spouse or children can be named the beneficiary. That is not correct. You can also have more than one beneficiary. The only requirement is that your beneficiaries must have an insurable interest. You can also buy life insurance for another person if you have an insurable interest in that person.
Finally all of us want to know what happens if the premium is not paid on time. Most life insurance companies allow a grace period, generally 30 to 31 days to make a payment on your premium. If you do not pay within this period, your policy will either remain open, or end. A term life insurance policy will generally end. If you have a permanent life insurance policy, you can use money you saved up in your cash value to pay the premiums with.
