Getting a Life Insurance Policy
Buying life insurance for the first time may seem like a daunting process.
By following these simple steps you will be able to get the job done effectively so that it will suit the needs of you and your family.
First, work to expand your financial vocabulary. This can be done by taking a class on finance, reading a book on finances, or finding helpful information on the internet.
Before you meet with a life insurance lawyer make sure that you know the financial lingo.
It is common that they will use words such as cash value, premium, dividends, death benefit, and there may be others.
It will be helpful for you to know these terms before you start meeting with an insurance lawyer.
Second, recognize the benefits of having the coverage.
Most people should get life insurance at some point in their life because it is important to their family.
This kind of insurance is almost always beneficial, but for some situations it may be considered unnecessary.
No one should buy a policy just because it seems like a good idea.
Life insurance is designed to be able to provide families with financial security in the event of the death of a spouse or parent.
In the event of a death of a parent, its protection can help to financially secure the family through the rough times ahead.
Life insurance that is collected by the family may help pay for mortgages, a college education, help to fund retirement, provide charitable bequests, and generally plays a large role in estate planning.
If others depend on your income for support, you should strongly consider getting coverage.
You may want to consider purchasing a small starter policy. Keep in mind that the fewer years you have lived, the less expensive your coverage will be.
Third, establish the amount of coverage you need or want. This amount will vary from person to person.
The amount of money your family or heirs will receive after your death is called a death benefit. There are many different formulas that people have come up with to determine a death benefit.
One of the easiest ways is to simply take your annual salary and multiply it by eight.
If you want a more solid figure, you can add up the monthly expenses that your family will likely have.
Remember to include the one-time expenses of a death and the ongoing expenses such as a mortgage or school bills.
Then, you take the ongoing expenses and divide by .07. The number you get from this will indicate that you will want a sum of money earning approximately 7% each year to pay those ongoing expenses.
Add to that amount any money you’ll need to cover one-time expenses and you will be left with a rough estimate of the amount of life insurance you need.
Fourth, find the policy that works for you.
In our world, there are many choices when it comes to life insurance.
There are two basic types that are generally referred to as term insurance and permanent insurance.
The first policy is called term insurance.
Term insurance provides life insurance protection for a specific period of years. Benefits from term insurance are often used to help pay off outstanding debts in the event of a premature death.
Generally, term insurance is the least expensive form of life insurance.
Term provides pure insurance protection only. In other words, it does not accumulate a higher cash value and generally does not receive dividends.
Whole life insurance is also known as permanent insurance. In contrast to term insurance, whole life continually protects.
Another important difference between the two is that whole life insurance can build cash value. This is a major benefit to obtaining whole life insurance.
Fifth, find a quality company to work with. Remember that an insurance policy is only as good as the company that backs it.
Be sure to check the business history of the company you wish to get your policy from. You want a company that has and will be around for a long time.
It is important to know for certain that the company that issues your policy will be around to take care of your family and loved ones that were left behind.
As you search for the right life insurance policy for you and your family, remember these steps and implement them into your search.
When you take the time to choose the best policy for you, you will have the peace of mind to know, that no matter what happens, your family will be safe and secure.
About the author
Jack R. Landry is a resident of St. George and has written hundreds of articles relating to tourism and St. George Utah real estate. He has been involved in local travel and tourism for over 20 years. Contact Info: Jack R. Landry JackRLandry@gmail.com http://www.Sunbrook.comTags: life insurance lawyer San Francisco