Life insurance is a policy protecting beneficiaries of the policyholder from financial burden in the event of the holder’s death. The policy is designed to offer loved ones an unburdened chance to mourn a death and celebrate life. Selecting the right policy is tricky and time-consuming. At Northwood Mortgage™, we receive many questions regarding policies and providers, so we’ve created a list of four life insurance tips to live by.
This is what you should know about life insurance, especially if you’re a first-time buyer.
1. Only Compare Policies of the Same Type
There are two types of policies in life insurance, which are term and whole. Term insurance provides protection over a period of years determined in the contract. It comes with lower premiums, but offers no opportunity for borrowing against the money banked there. Whole insurance is more expensive, but provides coverage until death and can be used as a loan of types, depending on your policy.
It’s important to compare policies of the same type to get the best price and coverage. If you compare a term policy from one company to a whole policy from another, the outcome will be entirely different. However, if you compare a term policy from one location to a term policy at another, you’ll get a truer reading of which brand is best.
2. Request a Free Look Period for Your Policy
The free look period is a time following your agreement to a policy, throughout which you can still make changes or cancel the policy with no repercussion. Most life insurance companies here in Ontario provide the option for a free look period.
Even if you don’t plan on changing your policy once it becomes active, having this extra time to thoroughly research your policy will help ensure you’ve chosen the right one for you. As far as life insurance tips go, opting for a free look is a big one.
3. Policy Riders Improve Your Coverage
One of the life insurance tips you can take to the bank is to opt for riders in your policy. A life insurance rider is a provision that allows you to change the current terms of your policy. Perhaps you need less coverage than the policy stipulates and don’t want to pay more for something you won’t use. A rider helps you change the terms to fit your current needs. Similarly, you could add a rider to add extra parties to your policy in the future should you get married or have children.
The terms of your rider would be agreed upon by you and your policy provider before signing for your policy. Riders can be unique to those who opt for them, or additional offers provided by your insurance company at a cost.
4. Ask Your Provider for More Life Insurance Tips
The best place to get life insurance tips is through a registered practice. At Northwood Mortgage, we specialize in a variety of mortgage and estate-related services, including life insurance policies. Our experienced and professional team is always happy to answer questions and offer advice to new and current clients.
For more information on life insurance and how to choose the right policy, contact us at 1-888-492-3690.