How To Choose Life Insurance That Truly Fits Your Needs
How To Choose Life Insurance That Truly Fits Your Needs Staff

If you have decided to buy life insurance, the next step is the critical part of choosing a policy that truly fits your needs.

Finding the right type of life insurance that is suitable for your needs is not easy. This is because different life policies carry different premiums and offer different benefits.

To find out the right amount of coverage that best suits your goals and budget, there are several things you’ll want to put into consideration.

Below are the crucial steps to consider when choosing a life insurance plan;

Evaluate Your Insurance Goals

Insurance goals vary from one person to another. Many people take out life insurance primarily to cover living expenses for their loved ones when they’re no longer around to contribute.

However, you may also buy a life plan to support a favorite cause, accumulate savings or maximize the income you will have in your retirement.

If your primary goal is to safeguard your family’s financial security, then term life insurance is sufficient. It’s the most affordable type of coverage that lasts a set period of time. A term insurance plan also offers a guaranteed payout if you pass away during the term.

If you’re interested in lifetime coverage, permanent life insurance might be a good fit. You can also consider investing in a plan that caters for mortgage repayments, children’s college tuition, outstanding debts and more.

If you’re not sure or need help deciding which policy best suits your needs, you can talk to a life insurance expert like Caspian Insurance. Their friendly and knowledgeable staff is always available to answer any questions that you may have and help you make the best choices for your family.

Calculate How Much Coverage You Need

This is the most difficult part of choosing life insurance. Many financial experts recommend multiplying your annual income by at least ten to get your ideal life insurance.

However, this criterion is hard to pin down. There are several factors that you should keep in mind when evaluating the amount of life insurance coverage you need.

If you have debts, for example, your survivors may find it difficult to repay them in your absence. The same applies if you still have school going children and need to secure funds for their education.

Thus, to determine the actual coverage you need, figure out the following first:

Your family’s financial needs after you die. This includes income needs, outstanding debts, mortgages, children’s education, final expenses, etc.

Any financial resources that will be available to your family after you die. Examples are social security, group life insurance, liquid assets like cash in hand or bank, and other investments.

How soon your family will get access to these resources upon your demise. In the case of social security, for example, your surviving spouse is entitled to receive the benefits immediately if there are children who depend on your income. If not, the funds may not be available until the surviving partner is aged older than 60.

Next, deduct the sum of your family’s available financial resources from their financial needs to arrive at an adequate amount of coverage to buy.

Determine How Much Premium You Have to Pay

Online premium calculators can help you determine the amount you have to pay as the premium and select the policy that offers the best deal. Simply input the amount of annual income your dependents would need versus the length of time they would need financial support.

Before choosing a life insurance policy, make sure you can afford the premiums that come with it. If you’re concerned about your ability to keep up with monthly premiums, compare different policies and choose one that fits your budget.

Also, select the term of the policy that is ideally suitable for you. The term of the policy refers to the number of years you expect your family to depend on your income.

As a rule, you can figure out your correct policy term by subtracting your current age from the age at which you expect your earnings to stop.

Select Your Ideal Life Insurance Policy

Choosing the ideal life insurance ultimately boils down to your needs, both immediate and future. There are two basic types of life insurance:

Term life insurance

Term life insurance offers protection for a specific number of years—usually 10, 20, or 30 years. It pays out a benefit if the insurer dies when the policy is still in effect. Relatively speaking, this type of policy is cheaper and most people tend to afford it.

If you’re on a limited budget or just want insurance coverage for a set period, a term life policy may meet your needs.  However, keep in mind this type of policy has an expiry date. No payout will be made by the insurer if you outlive the policy period.

Permanent life insurance

A permanent life insurance policy lasts your entire lifetime, as long as you pay the premiums. This type of policy usually comes with higher premiums, which can be attributed to the fact that it comes with a cash component.

Permanent life insurance builds the policy’s cash value over time. You may be able to withdraw or borrow against the policy’s savings while you’re still alive and use the cash as you wish.


Life insurance is a crucial tool for financial planning. When choosing life insurance, it is essential to assess your financial situation and needs to make an informed decision.

If you feel overwhelmed by the sheer amount of things to consider when choosing the best life insurance policy with sufficient coverage, Caspian Insurance may be able to help.

We will assess your financial needs and goals and recommend the right policy that truly fits your needs.

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