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Life Insurance Products
Things
to consider......
Why
Do I Need It?
What
Kind of Life Insurance?
An
insurance and related services tool
Benefit
Riders
How
much Life Insurance is right for you?
How
much coverage should you own personally, not counting
group term coverage? With so many people frequently changing
jobs these days, many are learning that owning and controlling
their own life insurance policy has many important advantages.
In addition they are often surprised to learn that they
have been significantly underinsured.
Traditionally,
individuals tend to buy life insurance in round numbers
— such as $100,000, $250,000 or $500,000 — or
using the general rule of purchasing 8-10 times their household
income. Few actually try to determine the correct amount
to purchase. While doing so is a relatively simple process,
it can be uncomfortable for some because it involves thinking
about death. Given the importance of this issue to survivors,
the best solution is to move beyond that discomfort and
plan accordingly.
Determining What You’ll Need
Consider
family needs within the first few months of your death.
Funeral expenses, administrative costs and other immediate
expenses can be shocking. In addition, clearing up unpaid
bills or revolving debt like credit cards or consumer loans
is often necessary.
Determine
how much will be required to pay off any remaining mortgage
balance on your primary residence.
Providing
an education fund for your children is also critical. There
are many schools of thought regarding this, but you must
consider how much money you would like to see allocated
for your children’s education in case of your death.
The
final issue is often the largest — income replacement.
If you have taken care of the above-mentioned needs, most
studies indicate that a typical family can maintain its
standard of living on 60-75 percent of pre-death household
income. While it is a personal choice, you must consider
whether the beneficiary will live off the principal paid
by the policy or the income it generates through investments.
It is also important to consider the length of time this
money will cover. Most families decide that this should
last at least until your children are out of college.
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