Ten Tips to Get You Started with Life Insurance
While many people understand the importance of life insurance they aren’t sure how to go about getting it. Here’s some information you should know.
You need life insurance if you have dependents
Life insurance is important if you have children and other loved ones that depend on your income. Its primary function is to protect your income. Life insurance allows your dependents to continue living the same way as you would if they were earning a salary.
You can easily calculate how much money you may need
Experts recommend a minimum of ten years’ worth of income to provide a reasonable estimate for how much life insurance you should purchase. It is possible that your life insurance requirements may change over the years. You may need to review your life insurance coverage periodically to assess whether you are in need of more.
Life insurance is better than no insurance
If you don’t like the #2 strategy, you can start with coverage equal to your outstanding debt (including student loans, mortgage payments, and car payments), plus five years salary. For those who are not working or a stay-at home parent, you can use the average American salary of $ 49.764 as your income to estimate your earnings.
Life insurance can be cheaper than you might think
Many people are able to get term coverage through a reputable company for an affordable price. As you age, however, life insurance becomes more costly. As long as you’re young, it’s a good idea to get as much as possible while you are healthy.
Life insurance is a smart financial move
The annual cost of term insurance will be approximately one percent of your annual income. A good deal is to invest one percent of your income in term life insurance to protect years worth of income.
You should know the amount of life insurance your employer offers
Take a look at what coverage your company might offer. You might also consider purchasing additional life insurance. This could be done through your benefits plan at work or your own policy.
Your life insurance needs may change over time
Let’s say you have plans to increase your family, move into a new place, or get a job. These life changes can impact your insurance needs. Check your coverage when you receive your Social Security Statement in the mail or during your benefits enrollment at work.
Term life insurance can be a simple way to get started
Term insurance is a quick and affordable way to protect your family in the short-term. This insurance expires at the end so you can use it to cover needs you know you will need, like paying off a mortgage and funding college.
Whole life insurance is also an important part your financial plan. It is flexible and can help you reach several important goals. These include protecting your income and building equity, providing an additional source for retirement income, and leaving a financial inheritance for your loved ones. You can supplement retirement income through loans or withdrawals of accumulated cash values (although the policy’s cash value and death benefit will be reduced by the amount taken as well as any loan interest).
You should consider the financial strength of the company you purchase from and its reputation.
To ensure that your guarantees are kept, it is crucial to consider the financial strength of the life insurance company you select. Before you make a purchase, ask around and do your research. (Publicly-traded life insurers are required to report on financial status four times a calendar year.
Good advice can’t be replaced
Knowing more about life insurance basics will give you more control over choosing the right policy for you. Some prefer to talk to a financial professional in order get the best answers. Others prefer doing their own research. Whatever method works best for your situation, protecting your family with adequate life insurance coverage is an essential part of your financial plan.
Additional Resource:
https://tpllife.com/
https://extension.missouri.edu/publications/gh3422
https://www.maxlifeinsurance.com/