Money Matters: How & when to shop for life insurance

Reported by: Brittany Price
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Updated: 10/30/2013 12:34 pm
Life insurance can be a powerful asset.

"To do things like pay for your final expenses, any outstanding debt, or to replace your income if needed," Tammi McAda, State Farm Insurance Agent said.  

McAda said the first step is knowing when to buy a policy. 

"The big keys are life events. Say you get married or have a family, those are the times when most people think about life insurance because now there are people that depend on you," McAda said.  

It's less expensive when you're young and healthy. 

"Once you have a medical condition, you can't purchase life insurance," McAda said.  

The next step is deciding between the two basic types. 

"The first type is term life insurance. It's designed to be temporary. Usually you buy it for a set number of years, 10, 20, or 30 years," McAda said.  

This type is the most affordable. 

"But it doesn't have any lasting values. It doesn't have cash value and it will eventually go away," McAda said.  

The other type is permanent, or whole-life insurance.

McAda said it's smarter buy, but only if you can afford it. 

"It lasts your entire life. The premium will stay stable. But there will also be other living benefits to that policy.
You'll get cash values and dividends back where you would have money even if you didn't have a death benefit," McAda said.  

Be aware of where you get your insurance. 

"A lot of times people get life insurance through their employer, which is a great benefit. But you have to be careful because sometimes you can't take that life insurance with you when you leave. You need to ask that," McAda said.  

People should know that life insurance is not one-size-fits-all.  

"I would always advise you to talk to a professional. There are a lot of different caveats with life insurance policies," McAda said.  

Using a "life needs calculator" can also help determine the best policy for your needs. 

You can find one at 

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