No one enjoys thinking about the fact that they need life insurance, but from an insurance standpoint–it’s the only insurance you are GUARANTEED to use in the event of a claim.
So now that we have an understanding of our mortality, let’s not make a huge mistake and buy the wrong type of life insurance.
1. I believe this in our Top 10 core beliefs and it applies here: buy your life insurance from a professional that has the heart of a teacher, not a salesperson. You need the facts, not a sales pitch!
2. Understand what you are buying and what you aren’t. If you can’t explain to your friends what you just bought–you shouldn’t have bought it.
3. K.I.S.S. principle applies here. (K)eep (I)t (S)imple (S)illy! Your life insurance should be a very simple product without any fancy add-ons or riders.
4. This is protection, not an investment! Do not use life insurance as a way to invest for your kid’s college or your retirement. If your advisor/friend/neighbor/co-worker/etc is trying to tell you that they are going to make all kinds of money buy investing in life insurance–it might be true, but they could have made a boat-load more if they did the math and kept their investments separate.
5. Use a broker that is able to shop around for the best rate and best company. Captive agents can only sell for their insurance company. Brokers, life myself, sometimes can sell even the policies that a captive agent only can, except a broker will have access to dozens more companies.
6. With #5 in mind, the cheapest rate is not always the best policy. You need a company that will be around in 30 years or whenever your policy will have a claim on it. Remember, you won’t be here when it’s time to file a claim. Don’t make your beneficiaries scramble through 800#’s to get your life insurance proceeds.
7. Buyers remorse? Waking up in the middle of the night after buying life insurance thinking that you bought the wrong policy? Not to worry. You have 30 days to cancel without any penalty.
8. Apply for the most you think you will need. Example: you know you need $250k, but your wife will sleep easier knowing you have $500k. Apply for the $500k policy. Life insurance companies are more prone to giving you a better rate the higher your death benefit is–like buying in bulk. Plus, you may surprise yourself and get a preferred rating and be able to buy that $500k policy for almost the same price as the $250k one. And if you don’t get the rate you want, you can always tell the insurance company to lower your death benefit back to what your budget allows.
9. The earlier you buy it the cheaper, but I typically recommend people to buy it no sooner than when they get married or start having children (whichever comes first). If you delay buying it, you run the risk of not qualifying for it. Life insurance starts to get real expensive past 45 years old.
10. Term insurance will always be your best policy. Tailor the length of the term policy with the help of your agent.
I don’t like it when my clients pass away, but when they die with life insurance, it makes the funeral much easier for everyone. Many times I have told a grieving widow, “I am so sorry for your loss. When you are ready, come by the office and we’ll talk. I’ve already left my contact info with the funeral director so they won’t be asking you for any money.”
Call, email, text or find us on social media under: TWFG-Benavides Insurance. Even if you don’t buy from us, use us as a resource–we are here to help!