The road to financial wellness, regardless of your net worth or income level, can appear to be full of barriers and detours at times. Including life insurance in your financial goals may provide you with more peace of mind for you and your family.
While we all hope to be there for our loved one’s tomorrow, no one knows what the future holds. That is why life insurance is such an important safety net to have.
Five Things to Know About Life insurance
1. Use an Agent to Help You Understand What the Best Policy is For You
The life insurance industry’s automation saves insurers a lot of money, but it doesn’t do much to educate consumers about which forms of coverage are best for them. You’re missing out on the one-on-one connection and personal care that used to be typical in the industry if you don’t have an agent. It’s because of that personal relationship that you’ll be able to acquire the coverage you require at a price you can afford both now and in the future.
When you use online quotation engines, they presume you know everything there is to know about life insurance, even if you don’t. Furthermore, specific internet quote engines may place you in the incorrect risk category. What is the significance of this? Because your premium is determined by your risk classification.
2. Understand the Benefits of Life Insurance
Your dependents won’t have to worry about on-going living expenses
Life insurance can cover final expenses and medical bills
Younger people may acquire more coverage at lower immediate cost
You can get coverage for chronic and terminal illnesses
Policies can supplement your personal retirement savings
Policies can be combined to serve the individual needs of individual policyholders
Conversion features policies provide higher future death protection
Life insurance payouts are tax-free
Policies can be used as collateral for certain obligations and loans
Proceeds can be paid to the beneficiary without delay
3. Know How Much Coverage You Need
This is where an agent can help you understand the amount and kind of life insurance you need. It can be difficult to know how much life insurance you need, but it should take into account both your financial obligations, needs, and your assets. The following is a good calculation:
Add up all of your debts and obligations, such as a mortgage, annual living expenses including, college tuition.
Use this number as an amount you might need in investment income to fund your daily living expenses.
Secure a policy limit that will provide this return without using the principle. Generally, this might be ten times annual income needs.
4. Have Your Agent Help You Understand the Different Kinds of Life Insurance Products
There are many kinds of life products that fit specific needs and financial situations. While term life insurance is good, it may not be right for your circumstances. A good agent will review these with you and help guide you to the best option.
Term insurance and cash value life insurance are the two most common types of life insurance. Term insurance provides reduced rates in the beginning, but it does not accumulate cash values that can be used in the future. Whole life, universal life, and variable life are all examples of cash value life insurance. Your decision should be based on your current and future needs, as well as your financial resources.
Don’t forget to consider life insurance for a stay-at-home spouse. If that person passes, there will be expenses associated with the many important tasks they undertake for the family.
5. Review Your Life Insurance Needs Every Three to Five years
What impact will inflation have on your future requirements? Are you going to require more insurance as your family grows? Every few years, review your policy with your agent to stay up with changes in your income and demands.
Don’t rely on employer-provided life insurance as your only option. These plans are good but may not always provide the coverage and limits you need.
Many insurance companies have simplified their application processes in the last year. Accelerated underwriting policies have premiums that are comparable to medically underwritten plans.
Leap | Carpenter | Kemps Insurance Agency Can Help
Protecting your family’s future is a big responsibility, but we can make it easier. When you work with Leap | Carpenter | Kemps Insurance Agency, you can rest assured that just like you’ve got your family’s back, we’ve got yours.
Since 2005, Donna has been a Life & Health Benefits Advisor with Leap | Carpenter | Kemps Insurance Agency, where she uses her three decades of insurance experience and knowledge to ensure her clients get the best policies for their budget.
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Leap | Carpenter | Kemps Insurance Agency provides Commercial Business Insurance, Employee Benefits, Life and Health Insurance, and Personal Insurance to all of California, including Merced, Atwater, Los Banos, Mariposa, Madera, Fresno, Modesto, Turlock, and Stockton.
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