Things You Should Know About Life Insurance

1. How Does Life Insurance Work?

Buying life insurance is not like any other purchase you will make. When you pay your premiums, you’re buying the future financial security for your family that only life insurance can provide. Among its many uses, life insurance helps insure that, when you die, your dependants will have the financial resources needed to protect their home and the income needed to run a household. Life insurance also can be used to help with other financial goals, such as funding retirement or education expenses. However, it is important to remember that the main purpose of life insurance is financial protection. If your primary goals are something other than protection, you should consider what other financial products are available to meet those goals.

2. Why Do I Need Life Insurance?

Life insurance is an essential part of the financial planning. One reason most people buy life insurance is to replace income that would be lost with the death of a wage earner. The cash provided by life insurance also can help ensure that your dependants are not burdened with significant debt when you die. Life insurance proceeds could mean your dependants won’t have to sell assets to pay outstanding bills or taxes. An important feature of life insurance is that no income tax is payable on proceeds paid to beneficiaries.

3. How Much Life Insurance Do I Need?

Before buying life insurance, you should assemble personal financial information and review your family’s needs. There are a number of factors to consider when determining how much protection you should have. These include; any immediate needs at the time of death, such as final Illness expenses, burial costs and estate taxes; funds for readjustment period, to finance a move or to provide time for family members to find a job; and ongoing financial needs, such as monthly bills and expenses, day- care costs, college tuition or retirement. Although there is no substitute for a careful evaluation of the amount of coverage needed to meet your needs, one rule of thumb is to buy life insurance that is equal to five to seven times your annual gross income.

4. How Do I Choose A Company?

More than 2,000 companies in the United States sell life insurance. While some consumers prefer to buy policies directly from a company, most people buy life insurance through agent. Before purchasing a policy, check the company’s financial condition. You can do this by asking the agent or requesting information from your state’s insurance department. A number of insurance rating services rate the financial strength of companies. These ratings can be found in large public or business libraries, or can be obtained directly from the rating service. There may be a fee for that information. Also check with the state insurance department to be sure the company is licensed in your state. Beware of buying direct online!

5. Final Tip!

Take your time. On the other hand, don’t put off an important decision that would protect your family. Make sure you fully understand any policy you are considering and that you are comfortable with the company, agent & product. Don’t rush into a decision just because you are feeling pressured. After you have purchased an insurance policy, keep in mind that you may have a “free-look” period usually 10 days after you receive the policy during which you can change your mind. During that period, read your policy carefully. If you decide not to keep the policy, the company will cancel the policy and give you an appropriate refund. Ask your agent. Review the copy of your application contained in your policy. Promptly notify your agent or company of any errors or missing information.

Nothing can truly replace the loss of a life. However, with life insurance, your love will live on by helping to provide your family with a solid future. Our Life Insurance Specialist can review your policy so you know exactly what you have and how much you need to protect your family from harm. We are available for appointment day or night here at the office or even at your home or work (MD, DE & VA). Don’t put off tomorrow! Call today 410-546-9388 or 800-649-8114.

Contact Us

720 E College Avenue Suite 1
Salisbury, Maryland 21804
Phone: 410-546-9388
FAX: 410-546-3818