Things to Know Before
Purchasing Life Insurance

When I first purchased a term life insurance policy for my wife and I, there didn’t seem like that much I needed to know besides the term of the policy and the amount our beneficiaries would receive if something were to happen to us.  Since I was an insurance agent (focusing mostly on health insurance) I called a fellow insurance agent to see which carrier had good term insurance rates.   He named a carrier we did a decent amount of business with so I purchased a policy through them.  At 24 years old, non-smoker and for a 500,000 policy I thought $500 a year was a good purchase—I was wrong.

If I could go back now, I would have done the following things differently:

  • Put in consideration to your face amount. The face amount of the policy is the amount your beneficiary receives if something were to happen to you.  A common factor is to say 10 times your annual income.  I personally believe in the 10x your income, plus any debt you may currently have.  Another theory that I recently heard was 65 minus your age.  The understanding behind this theory was that if something happened to you your family would have been expecting income from you through the age of 65, so life insurance is a great way to provide it.  An example of the last theory:  $100k a year income/35 year old man with a wife and 2 kids – He would need to get a term life insurance policy for 3,000,000 and then every 10 years try to scale down the policy.  This may seem a little excessive and yes I know that kids graduate and move out, houses get paid off, you could invest the money and make receive well over 100k a year with 3 million, but the theory of the idea is good.
  • Shop around. I was in insurance and did not shop for a rate like I should have. Now you can get a life insurance ”term” quote in a matter of minutes. Our advisors will pre-qualify you by asking you some health questions to let you know if you would be Preferred Plus, Preferred, Standard Plus or Standard. This way you would receive an accurate quote and not just a real low price that you have no chance of receiving. Do your homework it is important!
  • 10 Tips for a paramed exam. I did not prepare for the paramed exam like I should have and ended up raising some of my blood readings that pushed me to a standard rating. You may not think this matters but trust me it does.  Click on the link in this section to learn more about ways to keep your blood results in line with what they are supposed to be.

With this information you should be more prepared to begin your search for term life insurance.  If you have any questions please call MWG at 800.800.1397.

senior division manager Article added 08/30/2017 by Ryan Eaton
Senior Division Manager: Morgan White Group

For more info about Term Life Insurance, please feel free to contact me.
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