Welcome back to the Scale Your Small Business Podcast with your host, Jillian Flodstrom! This week, we’re talking about choosing a life insurance policy. This is an incredibly impactful and important choice that can often leave your head spinning. But, if we take it slow, break it down, and walk through the process, you’ll come out informed and confident in choosing a plan that works for your and your loved ones.
As you get started selecting a life insurance policy, consider where you are in the walk of life, what your needs are, and what your goals and desired outcomes are from making this choice. Get clear on your situation and allow it to guide your selection.
Understand that there are different types of plans and policies, the most common types of life insurance policies are term versus permanent. Term policies are like renting a house–you’re also renting the insurance. So, just like when you’re renting a house, when the term has expired, the policy’s over with. Just like when you rent a home, when you move out of the home, you take your stuff, but you don’t get any of the equity. Flip-flop that and you have permanent policies–ones that come with you regardless of term. It has cash value, the same way purchasing a home would when you go to sell it.
Consider how much coverage you really need. You don’t want to ever be over-insured. Ask yourself, “If something were to have happened last night, what would I need? This will put the policy you need into perspective. You want to make sure that you have enough money to make any payments that you want to make, pay anything off you need to, but also give yourself adequate time to grieve that person’s loss and to ensure that your lifestyle doesn’t have to change because that person is no longer there.
Get familiar with the application process. It’s fairly easy–you fill out an application and have a medical exam performed.
That information is sent to the agent and reviewed in the form of a medical credit report. From there, adjustments can be made. Don’t worry though, not all adjustments are bad! You may be in better health than you expected.
Finally, it’s up to you to choose where you purchase your policy. Your choices are a smaller local agent or a large national agency. Larger agencies have the benefit of being around for a long time and offer decent ratings on a large scale. Local agents are able to communicate and build a relationship with you throughout the process and tackle any challenges that come up in-stride and alongside you.
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