Buying life insurance is one of the most important financial decisions you can ever make.
Although deciding how much and what type of life insurance to buy is not simple, the importance cannot be overemphasized.
Not only does it protect the loved ones you leave behind, but it can also be a valuable tool for you as well.
While there are many things to take into consideration, check out these valuable tips that have been put together to guide you through your journey
Assess your current financial situation
You need to know your financial strength before figuring out what type of life insurance you need and how much.
Considering what you have in place for your loved ones who are dependent on you financially, you may discover that you are not prepared for the unexpected as you thought.
A financial planner is recommended to work with you to discuss what type of life insurance you should purchase, depending on your financial situation.
Decide how long you need the coverage
Life insurance is planned to last for some time or a lifetime. If you need insurance for some time, you should consider term, but if you need life insurance for as long as you live, you should consider permanent coverage.
Calculate how much life insurance you need
To determine the cost of what you will leave behind, you need to check out for debt (loans, rent, and mortgage). You'll also need to consider the life expectancy of whoever is dependent on your income.
You'll also need to factor in mortality(burial wishes and cost) and education. i.e, do you want to fund the education of your dependents, or do you want your policy to take care of your children's education?
Consider other advantages
Some permanent life insurance policies can be used as savings. Permanent life insurance policies are lifelong and have a cash value that tends to appreciate over time.
This permanent policy contains a death benefit which is the amount paid at the time of death, similar to retirement or tuition plans.
Name a beneficiary
A Life insurance beneficiary is a person or entity who receives the proceeds of your life insurance policy. When choosing a beneficiary, avoid naming a minor child as children may not be able to receive funds.
You can name a loved one that is of age, or if the policy is to benefit your business, then you must have put in place a formal plan on how you want the proceeds to be used.
Talk to a trusted advisor
When you are ready to purchase life insurance, you need someone with your best interest at heart to guide you through the process.
This will help you prepare better and ensure you consider all the crucial elements before taking the big step.
Call us at 717-435-8856 to walk you through the process!