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Life Insurance Tips for 2023

Monday, February 27, 2023

It is always a good idea to plan for what lies ahead, financially and otherwise. Sometimes, you can anticipate what’s ahead … and sometimes, you can’t. Luckily, with insurance, you can better prepare for the inevitable unknowns. Life insurance in particular should be a key consideration when planning for the future — whether that’s 2023 or 2043. Let’s take a look at some top tips for buying life insurance.

1. Use Independent Insurance Agents

Buying life insurance can be a fairly easy process when you use an independent insurance agent. Unlike agents who work for commissions from specific life insurance companies, independent agents take the time to build a relationship with you and can you help determine what coverage you really need. Since life insurance can be a long-term investment, you want to be sure you have the right policy, and an independent agent will help you find one.

2. Evaluate Your Assets and Liabilities

The purpose of life insurance is to help replace your income, or the value of your income, when you die in order to help protect your family’s finances and stability. Depending on your financial state, replacing that income could either be very important or perhaps not as much. Determine how much your family has in assets and how much your family owes in loans or other debts. Getting everything down on paper or in a financial planning document will help you drill down on the numbers.

does homeowners insurance cover rental properties

3. Determine How Much Coverage You Need

Have you already paid off your loans? Will your family be financially secure without you there? These are important considerations when deciding how much life insurance to keep or maintain. Once you’ve assessed your financial situation, you will be able to see more clearly how much coverage you need. The amount of your income that will need to be covered – and for how long – can help you find the death benefit amount that is right for you. Generally, there is no need to spend money on a personal life insurance policy if your family doesn’t really need your income to remain financially stable.

4. Decide Which Type of Policy You Need

Life insurance policies are either term life or whole life. Term life insurance provides coverage for a set amount of time, anywhere from around 5 to 30 years. Whole life insurance works exactly as it says – for your whole life! How much is whole life insurance? Well, it can be pricey. There are pros and cons to each type of policy, but the bottom line is that a term life insurance policy is typically much cheaper. Also, consider this: will you have people depending on your income in your older years?

5. Purchase a Policy (or Two!)

If you don’t have a life insurance policy yet, it may well be time to get one – if your family depends on your income, that is. Remember your financial assessment? Use that to help you determine how much coverage you need to purchase. If you already have life insurance and need more, you can purchase additional policies.

Let’s say you started life insurance coverage when you had a baby, and have since purchased a home. If you were to die, you’d want to be sure the amount of coverage you have overall would continue to pay the expenses associated with raising a child and the mortgage. Layering term insurance policies is an excellent strategy to keep the coverage going for as long as it is needed and to adjust for major life changes.

Life insurance coverage when you have a baby

6. Save Money on Your Policy

Life insurance rates are mostly based on your age and health. The rate you lock in will probably be cheaper the younger and healthier you are when you get the policy. But that doesn’t mean you can’t get insurance when you’re older as well! You can save on life insurance policies by:

  • Quitting Smoking
  • Reducing drinking
  • Getting healthier or losing weight
  • Improving your driving habits
  • Getting a health exam

7. Be Honest on Your Application

If you’re considering overselling your health on your life insurance application, don’t. Insurance companies can verify the information you tell them and they are able to uncover things about your medical history through independent research. Make sure not to omit or cover up information about your health history to prevent fraud charges, higher premiums, your policy being dropped or being denied altogether.

8. Don’t Be Afraid to Ditch Policies

Remember that financial assessment again? What if you are way in the black (go you!) and you are set financially? Good news – you can ditch those monthly life insurance payments and let the policy go! Really. You may no longer need life insurance if your financial house is in order, and that is a thing to celebrate!

If you’re ready to talk about life insurance options or have any questions at all, please don’t hesitate to reach out to us at Independent Insurance Associates! We are passionate about helping you get the best and most affordable insurance policies.