Questions to Ask When Buying Life Insurance Online
In many ways, buying life insurance online is no different from buying a policy in a more traditional way. The same types of options exist. On the other hand, buying online adds an extra dimension of choices and costs that you may not have experienced purchasing a life insurance policy with the help of an agent a few decades ago. It can be easy to start feeling overwhelmed with information and decisions as you plug numbers into comparison engines and your choices seem to expand rather than narrowing down. It may help to ask yourself a few questions.
What Is Your Budget?
Term is cheaper than whole-life, and depending on your budget, that may be the deciding factor for you. Both types offer a fixed premium for the life of the plan, but the difference is that term expires after a certain number of years. At that time, your premiums might go up if you choose to purchase it again.
What Do You Need to Cover?
There are general guides that say you should buy a policy that will cover a certain number of years of income, but it is really better to think specifically about your needs and those of your family. If you have no dependents, you may want a plan that will primarily cover funeral expenses. If you have a family but are a stay-at-home parent, you might want to think about how much your spouse would have to pay someone for child care, housekeeping and other tasks you perform. People who are the primary income earners for their families may want enough to provide five, 10 or more years of income as well as money for extras, such as education.
Is It Possible You Will Want a Viatical Settlement?
A viatical settlement is the term for selling a life insurance policy for less than the death benefit it would pay out but more than its value as a cash surrender. The third party who purchases the policy would then take over the premiums and get the full payout on death. While it means beneficiaries will not receive benefits, the money can be used to significantly improve a person's quality of life. It can be difficult to anticipate the possibility of a viatical settlement since it is generally something people do when they are terminally ill and need a lump sum of cash, but when looking at plans online, it is worth considering the possibility. The policy needs to have a minimum value, so it cannot be a term policy. A viatical settlement broker can help facilitate this process.
What Is the Purpose of Your Life Insurance Plan?
While the primary purpose of life insurance is to provide a payout on a person's death, it can have other uses as well. It is possible to take money out of a whole-life policy, which increases in value over time, but not a term plan. Some people may use this as an emergency fund, for retirement planning or for some other purpose.