If you are buying life insurance for the first time, you likely have a lot of questions. How do you determine how much coverage you need, which policy you should purchase, or even which company to buy the policy from. To make the process a little less daunting, we’ve listed 5 important tips.

Know The Different Types Of Policies

There are mainly two types of life insurance policies – term life insurance and permanent insurance. Term insurance is the more affordable of the two options. However, permanent life insurance offers long-term coverage and builds cash value as well. There are a lot more options within these categories that you can explore.

Work Out How Much Coverage You Will Need

The coverage you opt for is what your dependents will receive if you happen to pass away while the policy is in force. Given this, it’s important to choose the right coverage amount. A few factors that you should consider when deciding the coverage amount are your current income, the financial needs of your dependents, and the amount of debt you have. You can also use a life insurance coverage calculator to work out how much coverage you need to get.

Check The Reputation Of The Company

Don’t buy the first life insurance policy you come across. Make sure to ask family and friends for recommendations and check online reviews of different insurance companies to determine how reputable they are. The company you buy the policy from should offer excellent customer service and a simplified claims process.

Familiarize Yourself With Life Insurance Terms

To make an informed decision, it’s a good idea to start familiarizing yourself with terms that are commonly used in life insurance policy documents.

Compare Prices Of Different Life Insurance Policies

Life insurance is usually not expensive. That said, it’s still a good idea to compare prices of different policies before you make your decision. When you do this, just ensure that you are comparing policies that offer similar coverage.

If you are unable to decide which policy to buy, you may want to consult a life insurance professional who may be able to help you make the right decision.