Choosing the right life insurance policy can be a daunting task, but it’s an important decision that can provide financial security for your loved ones. With so many options available, it can be difficult to know where to start. There are key questions to ask yourself that can help you get started with the life insurance process and help ensure you and your loved ones are taken care of.

Why are you buying life insurance?

This question may be simple to most but understanding the reasoning behind the question will help you decide what kind of life insurance to get. Some of the reasons to get life insurance might be to replace income, pay off mortgage(s), or create a form of inheritance for loved ones. Choosing term life versus whole life insurance may well depend on your goals or reason for getting the insurance. Term life insurance provides temporary coverage for a fixed period of time, typically between 10 and 30 years. Permanent life insurance is designed to last a lifetime and provide a death benefit for your beneficiaries no matter when you die, as long as your premiums are paid.

How much protection do you want from your life insurance?

Your reason(s) for getting life insurance and the type you get may help you determine what level of coverage you need. One formula to help you decide on the level of coverage to have for income replacement insurance is to add your annual expenses and then multiply that by the number of years until you retire.

Example: Annual expenses = $60,000 x 12 (retirement in 12 years) = $720,000

This formula is just a “ballpark” number. Your situation may include a health situation where you feel you need even more coverage. Be sure to talk with a BankIowa financial advisor for extra guidance and assistance.

Do you understand insurance terminology?

If you aren’t currently in the financial industry, insurance terminology like “premiums” or “beneficiary” may be foreign to you. Ask a loved one who has been through the life insurance policy process or your BankIowa financial advisor about the terminology. Being informed on insurance terminology can help better protect yourself when signing forms, contracts, and more!

How much insurance can you afford?

For all big purchases, you need to make sure they fit into your budget today and in the future. Keep in mind that some insurance premiums increase with time. While one policy may fit your needs now, consider if it will fit your needs in 5, 10, and even 15 years from now. Ultimately, what you decide on for insurance may be dictated by what you can afford now.*

Conclusion:

By evaluating these questions, you will be able to make informed decisions about choosing the right life insurance policy. Remember to consider your financial goals, family needs, and budget when choosing a policy. Taking the time to research and compare your options can help protect you and your loved ones in the event of the unexpected. Speak to a BankIowa financial advisor about your specific insurance needs since this type of discussion may include estate planning and retirement and investment strategies.

*Any information provided is general in nature and is not tailored to your individual insurance or investment objectives.