When applying for a term life insurance policy, there are a few steps consumers must take first. According to Think Money, consumers must first determine how much coverage a family or loved ones will need in the event of a policyholder's death. This can be determined by calculating current costs of living, debts and any other expenses that would arise to replace certain chores or tasks of the policyholder in survivors' lives.
Consumers can also access quote comparisons from different providers online to see which providers offer the important coverage to fit a lifestyle need. Before making a purchase it is also important to understand all the terms and conditions in the policy, and ask a financial adviser any questions regarding confusing information or terms. If the consumer wants to change the policy or have access to the funds, he or she must first understand the details of their policy, Think Money reported.
Once the process of applying for life insurance is understood, consumers must decide when the best time to apply for a policy is. Marc Hebert, a registered investment adviser, said in a piece for WMUR that many consumers will reevaluate their insurance coverage right after getting married. The proper insurance coverage can help couples and new families protect against financial calamities, as well as safeguard their assets for future generations.
While newlyweds will often reassess all of their insurance coverage and go in on new policies together for auto, health or homeowners insurance, life insurance is a major product couples must think about before making a decision. Hebert said life insurance is a must-have financial product for couples and newlyweds who plan to have children, or if one of the spouses earns significantly more money than the other. Through a life insurance policy, the designated beneficiary will have access to funds in the event of a policyholder's death to avoid financial hardship and maintain a daily living expenses.
Hebert said many newlyweds not ready to have children who both make comparable incomes may feel life insurance is not necessary at that stage in their life. Newlyweds may still want to consider the product. For example, if a spouse were to die, life insurance could make sure the surviving spouse could still afford their mortgage payments on their salary. Many couples also bring personal debts into a marriage, that will then affect both spouses' financial situation. If a spouse were to die prematurely, the debt would fall on the surviving spouse to pay off, and life insurance can help ease this financial hardship.