If still you have not purchased a life insurance policy, it is very likely that you've been circling on the head the idea, together all those other tasks in the list of "then I do". You might have already begun to talk about it with your friends, or you've had alook online to see what options there are.
Buying a policy is an important decision and deserves much reflection. There are several important questions you should do you.
1. do I need life insurance?
In other words: what is the main purpose of your policy? The answer to this question is usually multiple and depends on if you are married and have children. These aresome of the most common reasons why people buy the benefit protection for deathof life insurance:
Protect the family income
Leave a legacy to children or grandchildren
Make a gift to children or grandchildren
Donate to a charity
Pay the funeral expenses
Finish paying the mortgage or other important debt
Pay a child's College education
Planning for a situation of special needs
Your answer to this question will influence the value of the policy you need, as wellas the answer to many of the remaining questions.
2. how much coverage do I need?
This is another potentially complex answer that somehow will dictate your choices. Think of it this way: If you pass, how much money you will need your family to meet its immediate obligations (medical expenses that are not covered, funeral costs, costs of liquidation of inheritance, debts), and then add any needed regular income tomaintain their standard of living and flow of money.
One of the most simple ways of calculating the amount of life insurance you need isto use a calculator online. You'll be asked to take into account your salary and current savings, the total of your final expenses, more some other factors, such as inflation. But you might also want to take into account the non-monetary contributions likechild care or cleaning the House, that they need to be added where you miss.
3. what type of life insurance should I buy?
"Term" and "permanent" are the two main categories of life insurance, and each hasits advantages. A term policy provides protection for a specific period of time, and adeath to your surviving family members benefit. It is a permanent policy of lifetimeand provides a benefit for death while you pay the premium, but it may also includea value in cash which can be acceder1 during the life of the insured.
Although a permanent policy tends to be more expensive, it may be the smart choice long term. Something else to consider: the role of your life insurance can changeover time, so you might want to consider a combination of both types of protection.
4 how time will need the policy?
This may be the most difficult of the essential questions. As no one knows when it will die, that is a good reason to at least consider a permanent policy. Although manyonly think of life as a means to replace lost income if they die during their working years, coverage during retirement can be important for family that he will survive you.
Leaving aside the life expectancy and retirement, if you are buying a life insurance policy to protect a specific interest (as a commercial loan or one mortgage), you mayalso have to think about potential that needs time to consider your options.
5 as time want to pay premiums?
Pay life insurance during retirement might not be a very attractive prospect. Although the policy's term ends if you decide not to renew your coverage after 10 or 20 years, many permanent life insurance products also offer shorter payment periods. As soon as the policy is paid in full, you won't have to pay more premium. So make sureyou explore your options.
6 do I need flexibility for my premiums?
Many life insurance policies require monthly, quarterly, semi-annual or annual payments, and if you win a stable salary, you shouldn't have any problems. But if you're abusiness owner or work by the Commission, it may be useful to have the flexibility to pay your premiums depending on your variable levels of cash flow. Some policiesallow you to pay one larger share of your premium when it suits you, provided youpay enough to cover the monthly charges of insurance according to your contract. Be sure to consider a policy that has a payment structure that works for you.
7. do I need any additional flexibility?
It is difficult to predict changes in your financial needs, but remember that life is unpredictable. Plan accordingly and considered a policy of life insurance that gives youflexibility. For example, the cash value of a policy of full life can be used for purposes other than the original purpose of the seguro1. In addition, many policies term canbecome over time permanent policies, and some offer the option2 increase insurance without a medical exam.
8. will I have cash value?
The good news is that many people who buy a term policy end up not using it. (Lifeis good). The bad news is they are left with nothing when the policy expires.
On the contrary, many permanent life insurance policies allow you to borrow against your value in cash in life, or give you the option to terminate the policy and take the surrender value in cash if you no longer need the insurance coverage. The cash value can supplement your retirement income, help you finance your children's education, or simply being available for any emergency. The choice is yours, but keep in mind that your ratio1 will be reduced to the cash-out of your policy.
9. who is protecting my family?
A life insurance policy is a long-term commitment, so it is important to work with acompany that you can trust. For this reason, you have to search well before makinga decision. A good way to compare companies is to see their financial strength ratings.
Answer the questions in this article is the first step to ensure that you get an insurance policy that fits your needs. Of course, after really thinking about life insurance and how it can help your family, likely have other questions. The next step is to talk with a financial professional who can help you answer these additional questions and to discuss your options.
