More than half of America doesn’t have life insurance because they believe it’s too expensive. Indeed, life insurance is not cheap, but it’s not unaffordable. Most of the time, people overestimate the cost of life insurance and avoid buying it.
According to statistics, about 52% of Americans hold life insurance, but only 30% of households have enough coverage. Besides being expensive, around 78% of Americans fear insurance fraud, which is quite common in the US. With more than 7,000 insurance companies operating in the US alone, it’s often an overwhelming task for consumers to find the right insurance agency.
If you have decided to get life insurance for yourself and your family, here are some tips to save yourself from a scam.
1. Costs It Will Cover After You Pass Away
The insurance money often pays the person’s funeral bills, outstanding debts, medical bills, etc. You need to look for a policy that helps cover these bills after you pass away. Your family will already be under pressure, so choosing the right insurance policy will help you save them from all the hassle.
2. Living Expenses that the Policy Will Cover After You
If your family is dependent on your income, you have to look for a policy that covers their living expenses for a set period. The ‘time’ to cover their expenses depends upon the coverage you have taken.
Check the number of family members and see which insurance plan works best for you. Many companies will show you different options, but only a good one will suggest the best plan for your family. Take your children’s raising costs, household costs, etc., into account before opting for an insurance plan.
3. Check the Cost of the Premium
The life insurance you choose will also decide the cost of the premiums. If you’re looking for insurance on a budget, you must carefully select a policy whose premiums do not go beyond your budget. Compare different policies until you find the best one based on your income and monthly expenses.
Francisco J. Faraco is a CFA charterholder with years of experience in the field. Francisco Jose Faraco lives in New York and is currently working as a Teaching Assistant in the Financial Mathematics program at the University of Chicago.
