Although many people understand the importance of life insurance, many avoid discussing it and, therefore, do not take the initiative to acquire it. However, it is not because they don't want to. In most cases, it is because they don't know enough about this topic and the benefits that it can provide. In fact, some people are intimidated by the topic.
Life insurance, though, can prove to be a great investment and saving for you and your family in the long run. No one knows what may happen overnight. Life has a way of taking twist and turns. Purchasing coverage gives you the security that you need to feel comfortable about the survival of your family, should something happen to you.
It is of great benefit to most people because of the protection and financial stability that it provides for their families. It should be an essential part of your financial plan. You can have an expert help you to evaluate the different types of policies and the amount of coverage that you need. Depending on your income and lifestyle, your agent will recommend specific policies that work best for your situation. There are a few issues to consider when thinking about any type. We will discuss some of them here.
The need for life insurance
You may have less need for life insurance if your loss of income would not affect anyone. This means that people who have absolutely no one else to depend on their income may be exempt to a certain point. However, even, in that scenario, you might need coverage for yourself to take care of funeral expenses.
This should never be optional if you have dependents or a family that will be affected by the loss of your income. A lot of people won't even think about life insurance until they have had children, but this is not always the best decision.
The amount of coverage needed
You should know by now how much your family really depends on you financially. If your income is lost, how would your family survive financially? Who will take care of the funeral expenses? Who will support them after you are no longer around to do so? It is advisable that you select a policy that at least provides coverage for the full amount of your income for the length of time you intend to work. It is also vital that you consider your outstanding debts that will need to be paid off. For example, if your debt included a car that you had a loan balance of $10,000 and a mortgage balance of $80,000 and you are currently 40 years of age with a retirement age of 60 years, then you should choose coverage that would take care of your debts as well as 19 years of your income.
The right policy
Not all life insurance policies are the same. Term life insurance is typically the least expensive option. It provides coverage for a specified period of time, from 10 to 30 years. At the end of the term, one can choose to renew the policy but it is often less expensive to purchase a new policy at that time (provided you are still in good health). Permanent life insurance (whole life or universal life), in addition to providing a death benefit, typically builds cash value, which can be accessed later in life. These policies are usually more expensive than term policies, as they provide coverage until death, whenever that may occur. A good life insurance agent should be able to explain the benefits of each and recommend a policy that fits both your needs and budget.
Where to purchase a good policy
Do your research online or get referrals from those you trust. A good independent agent will represent multiple companies and, therefore, will provide you with several good choices.
No comments:
Post a Comment