MMA Blog

5 Tips For Buying Life Insurance

Over the years, you'll be making quite a few major purchases. Said purchases will occur for some big reasons, like being able to drive where you want or having a place to come home to after a long day at work. But one of the less obvious investments is life insurance. If you haven't purchased a plan yet, this message is for you.

Roughly 51% of American adults have life insurance coverage, whether bought as individual policies or through their workplaces, according to estimates from LIMRA. Admittedly, some people secure coverage simply because they know it's important to have but may not be able to pinpoint the specific reasons for why it's important. This is one of several issues to take into consideration prior to buying.

1. Clarify what life insurance would be used for

The beauty of life insurance is its flexibility. For example, perhaps the most common reason why people buy coverage is so they can pay for final expenses, like funeral arrangements and burial. However, life insurance can also be used to protect your loved ones' financial interests, enabling them to take care of any debts you incurred that weren't fully paid off, like mortgage expenses or credit cards. In short, understand the reasoning for your having coverage in the first place. Your insurance representative can help you come up with motives that you didn't consider.

For most people, talking about life insurance can be very uncomfortable. Our agents at Marsh McLennan Agency (MMA) prioritize your experience by using real-life examples to illustrate the importance and emotional impact of having a policy in place to take care of family members.

2. Determine the amount you'll need

This can be a difficult answer to figure out, especially if you're new to life insurance. You don't want to purchase too much to save money, but it's even more important not to secure too little, as being underinsured is almost as troublesome as not being covered whatsoever. Fortunately, there are a variety of life insurance calculators that you can use online. Generally speaking, though, the rule of thumb is to multiply your current salary by eight. Given that circumstances change ─ including income as well as family considerations ─ you may have to adjust this figure down the line. The Insurance Information Institute has a more comprehensive approach to figuring out the proper coverage total.

Remember, even if you don’t have income, you may still need coverage. For example, stay-at-home parents and parents who work in an office often have many of the same concerns. Each person’s life insurance needs are significant and important to take into consideration.

3. Understand the difference between whole versus term

These are probably words you've heard associated with life insurance. They pretty much define themselves, as whole life insurance ─ or permanent ─ is coverage that never lapses. Terms must be renewed when the coverage period expires, which is usually after 12 months.

There are strengths and weaknesses to both options, but if you're looking to get the most bang for your buck, term is usually the better choice. However, by meeting with your insurance representative, he or she will help you determine which one is best for you based on your circumstances.

Storing your life insurance in a safe is a smart way to keep the policy protected and free from harm.

4. Tell someone once you've bought coverage

At its core, life insurance is meant to protect the financial interests of your loved ones. But you may be surprised by the frequency with which life insurance benefits go unclaimed. Based on numerous reports, unclaimed life insurance benefits number in the billions of dollars, the average being $2,000 per claim, according to The Zebra. Much of this is due to providers withholding the funds when no one claims them. When you buy coverage, make sure you tell the people who are important in your life about it. They can also use a locator, an online tool developed by the National Association of Insurance Commissioners.

5. Establish a beneficiary

Life insurance policies aren't all built the same, but one thing that they all have in common with one another is having a beneficiary. This is the person who will receive the life insurance claim benefits, and who may also be tasked with implementing your instructions on how you'd like the funds to be used. The Information Institute offers several tips on how you should organize your life insurance records so locating and claiming the benefits is as simple and efficient as possible. For example, be sure to detail the policy number, who issued it and when, as well as the type of policy. You should also maintain at least two copies, putting them in different places to reduce the risk one gets lost or is destroyed.

Talk with a specialist today.

Keep Up To Date

Subscribe to our blog for all the latest news, updates, and events from MMA and our partners

Subscribe

Tell us what you need. We’ll take it from there.

Get a Quote


    YesNo











        First, tell us about you:






        EmailPhone


        Next, tell us about your business:





        Now tell us about the coverage or coverages you need:


        Commercial InsuranceEmployee BenefitsHealth InsuranceSuretyOther



        NOTE: Before becoming effective, all changes, bind orders, or claim notifications must be confirmed by a Marsh McLennan Agency representative advising that your request has been processed.

        You are ready to submit the form:

          First, tell us about you:






          EmailPhone





          Next, tell us about the coverage or coverages you need:


          AutoHomeIndividual HealthUmbrellaRecreationalWatercraftRenter’s InsuranceLife InsuranceWedding Insurance



          NOTE: Before becoming effective, all changes, bind orders, or claim notifications must be confirmed by a Marsh McLennan Agency representative advising that your request has been processed.

          Now you are ready to submit the form:

            First, tell us about you:






            EmailPhone





            Next, tell us about the coverage or coverages you need:


            AutoHomeIndividual HealthUmbrellaRecreationalWatercraftRenter’s InsuranceLife InsuranceWedding Insurance



            NOTE: Before becoming effective, all changes, bind orders, or claim notifications must be confirmed by a Marsh McLennan Agency representative advising that your request has been processed.

            Now you are ready to submit the form:

              First, tell us about you:






              EmailPhone


              Next, tell us about your business:





              Now tell us about the coverage or coverages you need:


              Commercial InsuranceEmployee BenefitsHealth InsuranceSuretyOther



              NOTE: Before becoming effective, all changes, bind orders, or claim notifications must be confirmed by a Marsh McLennan Agency representative advising that your request has been processed.

              You are ready to submit the form:

                First, tell us about you:

                Contact Form

                -->




                    First, tell us about you:






                    EmailPhone





                    Step 1 of 2Next

                    Next, tell us about the coverage or coverages you need:


                    AutoHomeIndividual HealthUmbrellaRecreational

                     

                    WatercraftRenter’s InsuranceLife InsuranceWedding Insurance



                    NOTE: Before becoming effective, all changes, bind orders, or claim notifications must be confirmed by a Marsh McLennan Agency representative advising that your request has been processed.

                    Now you are ready to submit the form:

                      First, tell us about you:






                      EmailPhone


                      Step 1 of 3Next

                      Next, tell us about your business:





                      Step 2 of 3Next

                      Now tell us about the coverage or coverages you need:


                      Commercial InsuranceEmployee BenefitsHealth InsuranceSuretyOther



                      NOTE: Before becoming effective, all changes, bind orders, or claim notifications must be confirmed by a Marsh McLennan Agency representative advising that your request has been processed.

                      You are ready to submit the form:

                        First, tell us about you:






                        EmailPhone





                        Step 1 of 2Next



                        NOTE: Before becoming effective, all changes, bind orders, or claim notifications must be confirmed by a Marsh McLennan Agency representative advising that your request has been processed.

                        Now you are ready to submit the form:

                          Review Form

                            First, tell us about you:






                            EmailPhone







                            NOTE: Before becoming effective, all changes, bind orders, or claim notifications must be confirmed by a Marsh McLennan Agency representative advising that your request has been processed.

                            Now you are ready to submit the form:

                              First, tell us about you:






                              EmailPhone





                              Next, tell us about your claim:






                              NOTE: Before becoming effective, all changes, bind orders, or claim notifications must be confirmed by a Marsh McLennan Agency representative advising that your request has been processed.

                              Now you are ready to submit the form:

                                First, tell us about you and your business:







                                EmailPhone


                                Next, tell us about the surety bond you need:







                                NOTE: Before becoming effective, all changes, bind orders, or claim notifications must be confirmed by a Marsh McLennan Agency representative advising that your request has been processed.

                                Now you are ready to submit the form:

                                  Contact us for a quote:

                                    First, tell us about you:






                                    EmailPhone





                                    Next, tell us about the coverage or coverages you need:


                                    AutoHomeIndividual HealthUmbrellaRecreationalWatercraftRenter’s InsuranceLife InsuranceWedding Insurance



                                    NOTE: Before becoming effective, all changes, bind orders, or claim notifications must be confirmed by a Marsh McLennan Agency representative advising that your request has been processed.

                                    Now you are ready to submit the form:

                                      First, tell us about you:

                                      Contact Form

                                      -->

                                      cross linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram