So you took out a life insurance policy four or five years ago that gave ample coverage for your financial needs and in that regard it should still be giving you the best deal for your money, right? Wrong. If you think like this you might as well take your money and spend it on lottery tickets in the hope that some day your numbers might come up and you hit the jackpot.
Let’s take a look at this. Four years ago, your life situation was different, maybe you were a single apartment renter, maybe you were an avid smoker. There’s a chance that you were into doing daring things with your friends like bungee jumping on weekends off from your job as a motorcycle racer while studying to be a technician on a Nuclear reactor. Now, today you are married with two kids, a nice mortgage for that house in the suburbs and gave up smoking for your wife and the most daring thing you do now is watch I Love Lucy reruns on the couch as you relax from the weekly grind of selling hot dogs at the corner market while doing home schooling to learn to do Computer programming.
All right, so that is a little bit of overkill. But you get the drift. The coverage that was perfect for you four years ago would not even pay the cost of your premium on the house insurance today. So you, my friend, need to have your coverage looked at and upgraded and updated as applicable. Maybe you’ll be one of the few that has the same needs today as then and if so, great. You will have the peace of mind knowing that no matter what life throws at you, you have the correct insurance to make sure everything is taken care of and you can sleep easily at night.
The first port of call should be to your life insurance agent. They will be abe to look objectively at your changing situation and advise you on how best to insure your life. They can look at how much you are paying, and what you are paying for, and can help you redirect your money if needs be so that your loved ones are properly provided for in case the worst happens. It is their job to help you save money, increase or decrease coverage and of course avoid financial difficulty or even bankruptcy.
The two choices you have are term life or whole life insurance. Depending on your situation one is going to be a better option than the other. The term life policy may cost less but with whole life you can take into account the need to borrow against the policy if financial shortfalls should arise.
Today, most people are opting for the term option because the small cost difference is well outweighed by the huge benefits that will help to cover your unexpected emergencies. Sort of helps you curtail the fear of the unknown with the knowledge that if something happens you can wither cash it in if it is catastrophic or borrow against it if it is just a minor set back. Sort of a savings plan that allows access, as you need it without stiff penalties.
So, which plan is best for you, your family, and your current life situation? These are questions that are best directed to your agent and you can either discuss with your life insurance agent, if you have one, or research at the website where you have your coverage if you got it online on the Internet.
This article hopefully shows that whilst there is a choice to make, it should not need to be a daunting decision. You just need to remember that certain situations may arise in the future and like all things in life it is the better option if you are prepared for them. As long as you cover yourself you will be in a win win situation. If something does happen then you know that the policy is in place to cover that eventuality and if not you at least have peace of mind. If you obtain whole life and nothing happens then you also have a nice nest egg with which to plan your retirement around. But the important thing is not to put off to tomorrow what you can do today because you never know when that unexpected event may arise.