Once you have determined that you, or a loved one, have a need for life insurance, the next step is to determine if the need is temporary, for example, 5 or 10 years, or a need that will continue for as long as the person being insured is living.
If you decide the need is temporary, that is for a specific number of years, you will probably want to take a good look at what is called term insurance. That is insurance that is designed to remain in effect for a specific term or number of years.
For example if you want a wage earner’s income to be assured until children have completed a certain level of education, like college or an advanced degree, you decide how many years it will be until that objective is reached and then purchase insurance that will cover that period of time and then stop.
That is what term insurance does. It protects for a specific period of time and then stops.
Another example when you might wish to consider term insurance is when you decide at some future point in time that you will self-insure, that is, have enough liquid assets that will provide for your needs should bad things happen.
Term insurance can help here too. Just decide how many years it will take for you to be able to self-insure. Then purchase term insurance that will end at that time.
You also have the option of buying insurance for another person with whom you have what insurance companies call “insurable interest”.
For example, you probably have an insurable interest in your relatives. That means that if something happened to a relative of yours (a child or grandchild usually), you might be called upon as a financial resource to provide assistance.
Though you would be providing insurance for another person, you could still be the owner of the insurance policy. If something happened to the person insured, the money from the policy would be paid directly to you or to someone you selected to receive the benefit.
Ideally you will find an insurance agent who is knowledgeable and trustworthy. How to do that? Start by asking people you trust like friends or family members.
If you don't get satisfaction there you may wish to use the phone. Call reputable insurance companies. Explain you situation and ask for their best agent. The advantage of the phone is you can end the conversation much more easily.
On the other hand, if you get to feel comfortable with the agent, you may decide to drop by the office or even allow him/her to visit your home.
Just remember, you are in control. Don't buy anything you don't completely understand or is not perfectly clear to you.
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