A friend of mine decided to get his pilot’s license. The time came for his first solo flight. He told me it was such a rush getting the plane up in the air without the instructor and then leveling off high up in the sky. It was then he had a sudden thought. “What if something goes wrong? I really should get Life Insurance.” Fortunately he made it through his flight without incident and landed safely. In this week’s edition, we will discuss Life Insurance. Do you need it, how much should you get and how to chose the right type of Life Insurance.
Do I need Life Insurance?
To answer this lets pose a few preliminary questions.
1) Are you the bread winner of your family?
2) How will your spouse pay the bills if something happens to you?
3) Are you planning on starting a family?
4) Is there anyone financially dependent upon you?
The intention of Life Insurance is to assist any family left behind with their daily living expenses as well as any of your final expenses. A Life Insurance policy can pay off the mortgage on the house, put your kids through school and even makes sure your spouse or partner has income to live on when you are gone.
Life Insurance actually dates as far back as the Roman Empire, when soldiers would join burial clubs. When a soldier died, the other members of the club would pay for his burial and over time it evolved to cover additional expenses and leave a financial estate for heirs.
How much Insurance do I need?
Let’s take an inventory of your expenses. If you don’t have one of these bills it’s not an issue, just fill it in as best you can.
Weekly expenses such as food, gas, miscellaneous expenses _______
Monthly expenses such as the water bill, electricity, gas and telephone: _____
Total Mortgage Amount ______ and number of years left to payoff ______
Monthly Mortgage bill: ______
Car payment: ______ what would the payoff be ________
Student Loans: ______
Other expenses: _____
Total these up and you can get an idea of how much your loved ones might need if you pass on. Your licensed Life Insurance agent will use a similar survey to assist you in figuring out exactly how much insurance you might need.
What type of Life Insurance is right for you? There are some different types of Life Insurance products available. Term Life insurance gives you coverage for a block of time or term. You pay monthly or annual premiums. Your premiums remain at the same level for the duration of the term. However when the term ends you are without coverage unless you renew for a new term. There may be a premium increase for the new term or, if you have developed certain medical conditions, you may not qualify for a new policy. There are other types of products available such as permanent plans that do not expire unless you do not pay the premiums. There are products that build cash value over time and products that you can borrow against. Your licensed Life Insurance Agent can help you select the product that is right for you.
Life Insurance products may contain exclusions for hazardous occupations and hobbies or may have an additional premium added to cover these occupations and hobbies. Make sure that when you speak with your insurance agent you discuss your job, hobbies and future goals. This will help them to make sure you get the product that is right for you. For more information or to speak with an agent, Contact us.
A special note for those that are purchasing or already have life insurance policies in place. Make sure you review your beneficiaries frequently. As time goes on, you may have changes in your life, new additions or even deaths in the family. Make sure you stay in contact with your Life Insurance agent and update your beneficiaries when these changes occur.
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