Important Facts to Consider in Buying Life Insurance Policy

Life insurance is normally an expensive financial commitment, but it is necessary to cover your life. Protection against the loss of income due to death is important to ensure family members are taken care financially. Should disability occur, due to inability to work, income cease and expenses continues.

1. All policies fall into one of two camps.

There are term policies, or pure insurance coverage. And there are the many variants of whole life, which combine an investment product with pure term insurance and build cash value.

2. Whole life is expensive.

Policies with an investment component cost many times more than term policies. As a result, many people who buy whole life often can't afford an adequate face value, leaving themselves underinsured. The returns quoted by the agent are simply guesses - not reality. And some companies keep these guesses of future returns on the high side to attract more buyers.

3. Buy when you're healthy and young.

Older people and those not in the best of health pay steeply higher rates for life insurance - so buy as early as you can, but don't buy until you have dependents.

4. Match the term of the policy to your needs.

You want the policy to last as long as it takes for your dependents to leave the nest - or for your retirement income to kick in. Buy enough term coverage to fill your needs. Be assured that if a large claim is made, the insurance company will investigate before paying.

5. Keep your investing and insurance strictly separate.

There are better places to invest - and without the high commissions of whole-life policies.

6. Use the Web to shop.

Buying life insurance has never been easier, thanks to the Internet. You can get tons of quotes - and avoid the pushy salespeople.

7. Meet a Professional Financial Planner.

Financial planner helps you to find the best life insurance policy for your needs. You may need to compare a few policies before selecting the right one for you.

8. Investigate the Insurance Company.

Is the insurance company registered in Insurance Commission? Check their assets and liabilities, company background or visit their website.

Keep yourself updated since the world is constantly changing.