Life Insurance
You may want to buy life insurance to pay for expenses if you die.
Life insurance is important if you have children or other dependants, so that they will have money to live on if you die.
The person who will get the money when you die is the beneficiary.
There are two kinds of life insurance.
Permanent life insurance covers you for your entire life, until you die.
Term life insurance covers you for a fixed number of years or until you are a certain age (such as 60 or 65). Term insurance is less expensive in the beginning but you will pay higher premiums if you renew the policy after it expires.
Term life insurance is good if you have bigger expenses now and not too much money for insurance (such as if you have a young family).
Make sure that your term life insurance is renewable (you can get a new term at a higher premium without a health examination).
Make sure it is also convertible (you can change it to permanent life insurance later on without a health examination).
Most life insurance policies will let you cancel without a penalty if you change your mind in the first 10 days after you get the written policy.
If you return the policy to the company within 10 days, you will get back any premium you paid.
Questions to ask:
· How long has the company been in business?
· What qualifications does the salesperson have?
· What is guaranteed in the policy (premiums, benefits, riders)? What is not guaranteed?
· What is the difference between the policies you are looking at?
· For term policies, how much will it be to renew in the future? Are renewal rates guaranteed? When does the policy expire? When does any conversion right expire?
