People don’t like to think about death, for obvious reasons. It isn’t a fun topic to contemplate. However, the prospect of leaving your loved ones on their own can be an even scarier thought. For those of you who want their family taken care of when you’re gone, life insurance is important. Below are helpful ideas for choosing a life insurance policy.
Work out a budget to ensure that you buy enough life insurance coverage. Devote the time and effort to calculate just what your loved ones would need in the event of your death. Think about how much you spend on mortgage, tuition, taxes and retirement, to determine how much coverage you need.
You may be surprised to find out that some companies offer premiums just about half the cost of others. There are many sites online that will allow you to compare policies, coverage and prices, but be sure to figure your medical history into the equation.
It’s a good idea to review your life insurance policy each year to see if it still meets your needs. If you’ve had any big changes in your life such as a new child or the purchase of a home, you may have to modify your policy to reflect your new situation.
Before shopping for life insurance, put together a budget to project the amount of financial coverage you might need. Include your mortgage payoff, college costs for the kids, money to pay any other large debt obligations, funds to cover funeral and medical expenses and enough money to supplement your remaining spouse’s retirement funds.
Life insurance comes in many different variations that can fit just about any budget. Once you know the amount of coverage you need, decide whether you want insurance that provides permanent coverage, or just need term insurance to cover you until large expenses are paid off. Once debts are gone and the kids move out, you may decide to self-insure and won’t need life insurance coverage anymore.
If you want to have some control and decision-making power over the money you invest in your life insurance, consider a variable, universal life insurance policy. With these policies, you have the ability to invest part of your premium in the stock market. Depending on how wisely you invest this portion of your money, your death benefit can increase over time. You should have some knowledge of the stock market if purchasing this type of policy or enlist the aid of a financial professional.
All of us would love to leave our family a lot of wealth when we pass on, but you should avoid taking out very large policies if you do not have the means to make the monthly note. The trouble here is that while attempting to purchase that huge policy, your payments could lapse and you could lose it.
Sometimes people with life insurance (whole-life, not term) feel like updating or changing their policies after a few years, especially when a company introduces a better policy. This is why it’s important to think first before getting into a commitment, because changing now could cost you your premium payments and policy. So you should avoid this.
If you are married and want to save money on your life insurance policy, purchase a joint-life policy. This is an excellent option for anyone who would like to save money. On the other hand, a joint-life policy is terminated upon the death of one party and does not disburse a double payout.
Once you have your life insurance policy in place and paid for, it should be a real load off your mind. Your loved ones are now sure to experience minimal financial hardships caused your absence. You don’t need to worry about it anymore. So, in the mean time, get out there and start enjoying life.