Getting life insurance is a big financial decision, so here are some key factors to consider before making a commitment:
1. Your Financial Needs & Goals
Do you have dependents who rely on your income?
How much money would they need to maintain their lifestyle if you were gone?
Do you want the policy to cover funeral costs, outstanding debts, or future expenses like college tuition?
2. Types of Life Insurance
Term Life Insurance – Covers you for a specific period (e.g., 10, 20, or 30 years) and is generally more affordable.
Whole Life Insurance – Provides lifelong coverage with a cash value component that grows over time.
Universal Life Insurance – Offers flexible premiums and a savings component.
3. Coverage Amount
A common rule of thumb is to get coverage worth 10–15 times your annual income.
Consider all financial obligations, including mortgage, debts, education costs, and future expenses.
4. Affordability & Budget
Can you afford the monthly or annual premiums?
Term life is more affordable, while whole life is pricier but has investment benefits.
5. Your Health & Age
The younger and healthier you are, the lower your premiums.
Pre-existing conditions may increase costs or limit policy options.
6. Policy Riders & Add-ons
Accidental Death Benefit – Additional payout if death is accidental.
Waiver of Premium – Premiums are waived if you become disabled.
Critical Illness Rider – Pays a lump sum if diagnosed with a serious illness.
7. Company Reputation & Financial Strength
Choose a provider with strong financial ratings (A.M. Best, Moody’s, etc.).
Check reviews and claim settlement history.