How To Choose The Right Life Insurance

Choosing the right insurance for you can seem to be a daunting task because the details will be difficult to digest. Where should you start and what questions do you need to ask?
It doesn’t have to be an uphill battle. The best way to begin is to ask yourself the question- do I need life insurance right now? As you flesh out the details you’ll begin to find out exactly what you’ll need from a life insurance plan should you come to conclusion that you need one.
You may be surprised to learn that there are many different types of life insurance packages available. What’s more, you’ll need to make sure you understand each one so you can make an informed decision on what insurance to get.
The Need For Life Insurance
The kind of life insurance you need will depend on your personal circumstances. One of the most important questions to ask is if there’s anyone depending on you. It’s a safe bet that life insurance is far from the essentials list if you don’t have any dependents. Also, you won’t probably need it if you’re not the breadwinner in your family, i.e., you don’t generate most of your family’s income.
If your family depends on your income to live, i.e., they need it for paying rent, mortgage, utility bills, phone bills, food, and if your money is what’s sending your children to school, then you should think of getting a life insurance policy to ensure that the financial support you provide will continue in the event that you pass away.
How Much Will You Need?
There’s no single rule when it comes to determining the right number in life insurance. You’ll need to consider personal factors and circumstances. As a general guideline, write down the following questions and answer them as honestly as possible:
– Do you have other sources of income?
– Do you have debts?
– How many dependents do you have?
The right life insurance figure will be somewhere between 5 to 10 times what you make each year (annual salary). If you think you need more than that, then it will be wise to continue planning your life insurance policy with a professional financial agent to determine the exact coverage.
Life Insurance Policies
Universal Life, Variable Life, Term Life and Whole Life Insurance are some of the more popular life insurance policies being offered.
Universal Life Insurance is a type of permanent life insurance that has varying amounts for premium. Policy holders can pay for part of the premium using their accumulated earnings. The death benefits can be changed according to their preferences at the cost of a higher administrative fee.
Variable Life Insurance is also a kind of permanent life insurance that allows the holder to invest in any of the platforms being offered by the company. The gains are added to the cash reserve, with performances depending on the investment’s gains or losses.
Whole Life Insurance offers cash value and death benefits at the cost of having a considerably higher premium as compared to the other kinds of life insurance. Traditional whole life policies typically charge the same premium all throughout the term until pay-off. The policy stays in effect even when after the holder has paid off all the premiums. Whole life insurance is more expensive because of the fees and commissions that limit the cash value early on.
If you don’t have a life-threatening illness and are under 40 years of age, then the recommended policy is the Term Insurance. This gives you death benefits at a more affordable price, albeit with no cash value.
The Cost of Life Insurance
The least expensive life insurance option is the one that you’re employer is offering, if they have one in place. These group life insurance plans are typically term policies that are in effect as long as you’re an employee of the said company. Other policies have the option to be converted once you’re no longer with the company.
These factors affect the cost of life insurance- how much insurance you get, the policy type, the agent commissions and underwriter practices. Underlying costs are based on life expectancy elements, i.e., having a risky occupation or hobby (mountain climbing or engaging in extreme sports), being overweight, smoking, etc.
A 30-yr old healthy man can be expected to pay around $300 per year for a term life insurance coverage worth $300,000. In a cash value policy, the same metrics can be had for more than $3,000. Make sure to check all online resources about basic life insurance before going out and buying one.

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