Life insurance is simply intended to cover the financial risk of death. In general, anyone who wants to make sure that their family does not have to change its lifestyle after his or her death needs to have it. Life insurance has several variables: duration of coverage, frequency and stability of payments, as well as payout method and amount of coverage.
You can use simple rules of thumb, but a real evaluation of your needs should take your whole financial picture into account. Most advisors recommend an amount between 5 to 10 times your salary. Feel free to contact us if you would like to find out more about developing a financial plan.
Life insurance, unfortunately, is sometimes marketed as something it is not. Life insurance is not an investment. Some forms of life insurance have investment components to them. However, these forms of insurance still must pay death benefits and cover the attendant risks in order to work. Bear in mind that you are not guaranteed a health rating or premium level until all the information has been collected and reviewed by an underwriter. Predicting a person’s health rating is difficult yet very necessary for budgeting. The most common mistake most people make is they “guess” a better health rating than they will actually receive. This can result in a bad “surprise” later.
Supplying information to the insurance company can be a delicate process. The assistance of an insurance agent or advisor is almost always a huge help during this process. Fortunately, having help picking and getting a policy costs you nothing, and can save you a lot.