5 Factors to Consider Before Choosing Life Insurance

by | February 7, 2023 | Life Insurance

There are many factors to consider when choosing life insurance. Some people decide to get life insurance based on emotion, while others base their decision on financial security.

It is never too early to start thinking about the risks and rewards of life insurance. Life insurance may be the most important thing you ever buy.

In this post, we’ll look at some of the key factors you need to consider before buying life insurance. These include the type of life insurance you need, how much coverage you need and when you should buy life insurance.

1.   Assess your current financial situation

It’s critical to have life insurance in place to protect your loved ones should something happen to you. When assessing your current financial situation, consider your current assets and liabilities as well as your income and expenses. This will give you a clear perspective on how much coverage you need in case of emergencies.

It’s also important to build on your knowledge of basic financial literacy as it relates to choosing the right insurance coverage for your needs. Life insurance is one of the most important decisions you can make, but it can feel complex. Take your time before making a final informed decision.

2.   The best time to get life insurance

The best time to start getting life insurance is when you’re young and healthy since premiums will be less expensive compared to when you’re older. Getting insurance now will ensure that premiums will be at their minimum.

Men universally pay higher than women because the cost is based on risk, and typically men have shorter life expectancies than women. With that in mind, it would be wise to start early so that you don’t have to pay higher annual premium rates.

3.   The amount of coverage you need

The amount of coverage you need depends on your family’s needs, your financial situation and the risks you are willing to take. The type of policy that best fits your needs is the one that has the right coverage for your particular circumstances.

For example, if you are married with a child who is young, or if you have a mortgage, you may need to consider a term life insurance policy. Life insurance will protect your dependents in case something happens to you and is a smart way of securing your family’s future.

This Life Insurance Needs Calculator from Life Happens can help you get an estimate of what you need.

4.   The types of life insurance to get

Before getting life insurance, you will want to look at the various types of life insurance available. It is essential to understand what type of life insurance will be most appropriate for your needs.

Two types of life insurance are most common:

  • Term life insurance – With term life insurance, you are paying a set amount of money each month for protection for a certain period of time (usually 10, 20 or 30 years). Once the term expires, you can renew it for continued coverage, but the rates would be based on your age bracket at that time. 
  • Permanent life insurance – Permanent life insurance payments are to be paid for the entirety of one’s life. These are designed to put lifelong protection in place for your dependents. The other good thing about permanent life insurance is that it can have a cash value that you can borrow against in the future, depending on the total accrued payments built up.

5.   What affects life insurance rates

The first step in determining the cost of a life insurance policy is to understand the factors that affect your rate. These include:

  • Your age. The price of life insurance increases the older you are. You can lower your rate by taking out term insurance or purchasing a “convertible” policy.
  • Your health. If you have a chronic disease such as diabetes, cancer or heart disease, your life insurance rate will likely be higher than for healthy people.
  • Your marital status. Married people are considered a lower risk because they tend to live longer compared to single or divorced individuals.

Bonus tip: Don’t focus too much on premium cost

Term life insurance is the cheapest type and is most appropriate for people who want a fixed timetable for premiums. Permanent life insurance is more expensive but offers greater flexibility and benefits.

There are a variety of life insurance options available, and it’s important to choose the option that’s right for you. You don’t have to focus exclusively on premiums when selecting life insurance – you can also consider coverage, features and other factors. It can be helpful to work with an insurance professional to address these different elements.

When shopping for life insurance, you need to think about your needs and your budget. When you’re ready to get a quote, you can compare life insurance rates from multiple providers to find the policy that best fits your financial situation.


A lot of people think of insurance as a burden when, in fact, it’s not. Life insurance is a must-have for those who want to protect their loved ones in case anything should happen to them. The benefits depend on the type of policy you choose, so it’s important to make the right decision.

Anthony Martin

Anthony Martin

Anthony Martin, CEO and Founder at Choice Mutual, is a nationally licensed life insurance agent with 10+ years of experience and an official member of Forbes Finance Council. Obsessed with finances, building tech, and collaborating with other successful entrepreneurs.

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