Friday, June 22, 2018

Life Insurance Questions you need to consider

Buying life insurance is a major decision that impacts not just the lives of all those who depend on you, but also your own life and the way you live your life. Life insurance is today an extremely complex subject with a vast number of companies offering a huge number of coverage options. Trying to find your way through this maze can leave you dazed to the extent that you could easily make the wrong decisions on your coverage.

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Often the flaws or nasty catches in a policy will not be realized until the holder passes away, and the dependents do not receive the benefits as the policyholder had planned. Having a life insurance policy is not enough – you must have the right and foolproof coverage.

Seeking a reputed professional insurance agent would be the best way to ensure that the policy you buy is what you actually need, and the terms and conditions of the policy have no traps. Here are a few basic questions you should consider yourself first, and later in consultation with the insurance agent.

Do you need it?

Only a person with no dependents can do without life insurance. You do need life insurance, if: you have people who depend on you; your salary is what is supporting your family (either fully or in part); you have a mortgage to pay off; you have recurring expenses. The benefits that accrue on your life insurance will meet your financial obligations after you are gone.

How much coverage do you need?

No standard formula is available to help you calculate the ideal coverage you need. It is contingent upon the number of dependents, the stages they are in life, their and your lifestyles, and the financial obligations of every one of you. There is, however, a thumb rule that the policy value should be 10 times your annual income, and here again every family is different from every other. It is important, therefore, to have professional advice when calculating the value of a tailor-made policy you should buy.

What type of policy is right for you?

Term policies that pay the insured sum promptly on the death of the policyholder are the least expensive. Whole life policies that have a death benefit, as well as cash value, are more expensive. Within these two broad categories, there are options, and so you should get again expert advice on what is right for you.

What is the right premium?

Premiums vary depending on the insurance company and the plan you opt for. Each company has its own advantages and possibly some catches. An expert insurance broker that represents different companies will be able to guide you to the right company and the right policy.

Have you covered all the bases?

It is often difficult to consider objectively all the vital factors your insurance needs to cover.  Make a detailed list of all issues that will impact your policy choice. Discuss with the insurance agent who will be able to tell you if anything is left out.

Expert guidance is essential

These basic questions show how difficult it is to make the right life insurance decisions. The guidance of an experienced insurance broker will ensure peace of mind that comes from the right coverage you have made; in case of an unwelcome eventuality, those who depend on you will not suffer financially.

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