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Buying a life insurance policy: eight steps

Buying a life insurance policy can seem daunting if you've never done it before. The first thing to know is that you can choose between permanent and term life insurance. Each has its potential pros and cons, as well as a wide range of insurance premiums to choose from. Bankrate editor office has prepared a detailed guide to purchasing a life insurance policy.
Buying a life insurance policy: eight steps

Determine your needs

First of all, decide why you need an insurance policy. This could be the family security in the event of the breadwinner’s loss, children's education, retirement savings, or something else. Your goals will determine the type of insurance you need.

Assess your financial situation

See how much money your loved ones will need to maintain their usual lifestyle in the event of your loss. Consider monthly expenses, long-term obligations, cost of children's education and other needs.

Select insurance type

There are different types of life insurance, including term (for a specified period of time) and whole life. Term insurance is usually cheaper but only covers a certain period. Whole life insurance costs more but provides coverage for life and may include a savings element.

Compare offers

Review offers from several insurance companies. Compare the cost of policies, insurance conditions, payout amounts and additional options. Carefully study customer reviews and company ratings.

Decide on the size of the coverage amount

The amount of coverage should reflect your financial needs and capabilities. It should be enough to cover your family's basic expenses, as well as provide for any future needs.

Fill out the application and undergo a medical examination

To apply for a policy, you will need to fill out an application and provide information about your health. Most companies require a medical examination to evaluate your insurance risk.

Sign the contract

Once your application is approved, the company will ask you to sign the agreement. Please read all terms and conditions carefully before signing. Make sure you understand what circumstances are covered and what are not.

Review your policy regularly

Your living situation will be changing over time, so it is important to regularly review the terms of your policy. You may need to increase the sum insured or change the type of insurance depending on new circumstances.

Source: https://www.bankrate.com/insurance/life-insurance/how-to-buy-life-insurance/

Photos are from open sources.

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