You think buying insurance for the first time is easy? Often, first time buyers gets overwhelmed with weighing their options when buying the right insurance package their first time around. However, it’s not a matter of finding the right plan for you, but getting the right people you can trust your plan with. Today, let us be of help to you!
Most of us need life insurance at some point in our lives. But don’t buy a policy just because you heard it was a good idea, or that someone introduced it to you.
Life insurance is designed to provide your family with financial security in case of unforeseen circumstances. It provides them a future that you dreamed for them. This means it includes a lot of decision-making on the back end.
For first-time buyers, we get it, it’s overwhelming. Especially, since it’s a significant decision to make. You would want to get the best insurance to financially safeguard your family or assets.
But we’re here to help. With today’s blog, let’s read a few tips on buying insurance for the first time.
Tips for Buying Insurance for the First Time
Buying life insurance can be daunting, especially for first-time buyers. However, we’ve compiled our best tips from our experts to help you weigh down your options and get the right insurance policy for your needs.
Here are our tips for buying insurance for the first time.
1. Understand the Need for Insurance
You need to assess your current financial situation before you decide on a life insurance type that you’re getting.
You must consider what you currently have in place that can support your family who depends on you financially — including emergency fund, savings, retirement fund, education loans, or life insurance coverage through work.
With that, you can start working with a reliable financial planner to discuss your needs and how much coverage you can avail for your type of plan whether it’s a mortgage, children who rely on your support, or businesses to maintain.
2. Decide on a Life Insurance Policy Type
As, now, a life insurance buyer, you must think about getting term life or whole life insurance.
A term life policy will provide coverage for a specific time. This typically covers 10 – 20, or even up to 30 years long. This is often an affordable way to get coverage until you reach a specific financial goal, such as paying off your mortgage or putting your kids through college.
There are other types of permanent life insurance in addition to whole life. Permanent life insurance provides lifelong coverage, which is why it’s more expensive compared to term life insurance. It’s also more costly because it builds cash value.
That cash, however, can be used for whatever you want — it can cover emergency funds, supplement retirement income, help pay for long-term care or even cover the policy’s premiums.
Whether you choose a term or permanent policy depends on your needs and financial goals. It’s best to always consult with an expert to ensure you got the right policy type for your need.
3. Learn What Affects Insurance Rates
The two key factors life insurance companies consider when determining your coverage rate are health and age. The younger you buy life insurance, the cheaper it tends to be. That’s because you are more likely to be healthier when you’re younger, therefore less risky to insure.
Apart from that, some factors also contribute to how high your premium payment is or whether you qualify for discounts. Your lifestyle also plays a part in these factors. Smoking, health, lifestyle, family medical history, and your driving record are the other vital determinants of how much you might expect to pay for life insurance.
Some of these criteria are outside your control, while others are things you can remedy with simple lifestyle choices.
4. Identify How Much Coverage You Need
When getting life insurance, you need to make sure you consider how much more support would be needed to support your family and dependants for the long term.
Don’t just think about how long you can pay off debt, or mortgage. But think of your long-term goals. It’s essential that while you figure out and maximize your insurance coverage, you also pin down your short-term and long-term goals first.
Apart from that, think of a budget as well. Although, no matter what budget you have in mind for insurance, there will be one that will suit you the best. 2 primary kinds of insurance includes:
- Life insurance. This covers unexpected circumstances like sudden death, illness, and income during retirement.
- General insurance. This covers property loss, motor insurance, accident insurance and so on.
5. Only Buy From a Trusted Insurance Company
Working with the right and trusted insurance company or agency matters. Buying insurance is a significant investment, and you’ll want to invest wisely. With that, you wanted to make sure that you’re only working with the best.
At Harbor Insurance, there is no bureaucracy. It is at the heart of our service to understand our client’s needs and goals. With our customized life insurance policies, we make sure we deliver the best service for you.
As one of North Carolina-based insurance providers, we aim to help you determine the most appropriate coverage and find the best options with top-rated carriers. In as easy as a 30-minute consultation, we can let our team of skilled licensed agents help with urgency.
Whether you need life, auto, home, or business insurance — we got it all covered for you!
Book an appointment with us today!