Every day, many people make the decision to switch from one kind of life insurance policy to another. For those considering dropping a whole life policy in favor of a term life one, here are four tips to guide you:
1. Do not cancel previous coverage until new policy is in place.
The main benefit of converting from a whole life insurance policy to a term one is usually the savings. But do not cancel your old policy until the new one is in place. It is far better to pay for two policies for a couple of days than it is to risk going uninsured. The few days of extra coverage won't cost much. This is nothing compared to what you'd lose out on if an insured event did happen.
2. Do it sooner rather than later.
Don't put off buying your new coverage. If you made the decision because of the savings aspect, each month you wait might cost you money. The application and approval process isn't a long one. It takes one to two months on average. First shop around for good rates and then apply for coverage. You might need to do a simple medical exam and then once the results go to the insurance company, you get a final cost. If you agree to it, you sign the contract and you're covered.
3. Know which length of policy you want.
With a whole life policy, you don't have to think about how long you want coverage to last. It ends when you pass away. Term life is different. Your policy ends when the term is up. Usually a term is 10, 15 or 20 years in length and you can decide which one is best for you.
How do you decide? Consider your age, that of your kids (if any) and how much money you have in savings. If you're in your late twenties and have young kids, you're best served with a longer policy. A 55 year old empty-nester is probably fine with a ten year policy.
4. Do not rely on your employer provided coverage.
When you cancel a life insurance policy, switch to one that you buy yourself. An employer-provided life insurance policy is a nice perk, but you should not rely on it. When the day comes that you leave your job, be it your own choice or that of the company, you will no longer have coverage.
Once you make the decision to change your coverage, contact your Woodbridge VA life insurance professional. He or she can help you to start the process. If you have more questions about life insurance, our vast array of online resources can help you determine what coverage is right for you.