When purchasing life insurance there are a number of factors one must consider. First, how much life insurance do I need? Second, what kind of insurance do I need? Third, who should my beneficiary be? Lastly, when should I purchase life insurance? Some of these questions may never enter your mind. However, they are all important to your future.
How much insurance does one person need? Well, this is a hard question. How do you put a value on life? Yet, one must focus on the monetary considerations. How much would the funeral cost? Add to that the amount of wages you earn each year with tips and health benefits. All of this will be have to be replaced to your family. You should also take into consideration and subtract any life insurance you have from employers, banks, and others. However, this should only be done if the life insurance goes to your beneficiary after you die and not if the money is simply to pay off your debts.
Second, you should consider whether you want term or whole life insurance. You see, term life insurance is lower in payments. However, when you cancel term insurance, that is the end. The money then goes to the insurance company. Whole life insurance is a little higher priced. However, you retain a portion of the payment in an investment account. So, each life insurance premium is actually insurance and investments in one payment. The decision is up to you and should be based upon your income, preference, and age.
Now, most people know who they want their beneficiary to be. Yet, have you though of what will happen if your beneficiary is no longer living? It would be wise to name a hierarchy of beneficiaries just in case something should happen to one. In fact, this is especially true for husbands and wives who have a higher chance of dying together.
Lastly, when should I purchase life insurance? This may seem like a dumb question. Yet, there are many young adults who think that they have all the time in the world. In fact, they may have 60 years to go. However, the time to plan is now. In fact, if you invest in a whole life insurance policy, you can have a pretty good sized investment by the time you retire, if you are young. There is no time like the present.
No one expects to meet their end when they are young. Unfortunately, accidents happen and it is better to be prepared so your family does not have to deal with a financial burden on top of your untimely death. What we have to remember is that this planning isn’t to make our lives easier, it is meant to make our deaths easier to our families.
Robert Michael is a writer for Fhl Insurance which is an excellent place to find insurance links, resources and articles. For more information go to: www.fhlinsurance.com |
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