Any insurance can be a frustrating expense if you never need it and unfortunately it is just a fact of life that whilst most of us may get frustrated, it does come in very useful should anything happen. In the case of life insurance however, this is something which is an absolute banker as we all know that we are going to die someday. Life insurance is of course not obligatory but it is something that many people should consider investing in. We often get questions here regarding life insurance so we consulted with Jared Syel Denver-based insurance expert who gave us a quick breakdown of what you should be thinking about if you plan to get life insurance.
How Much Do You Need?
Working out how much cover you need is not always easy but Jared says that this can easily be done if we use what is known as the DIME method, let’s take a look.
Debt – What outstanding debt do you currently have in loans, mortgages, credit cards, student loans?
Income Replacement – Who currently depends on your salary and how much would they need in the even t of your demise?
Mortality – Who much money do you need for funeral and burial costs after you have passed?
Education – Do you need money to pay for a child’s education after your death? Or do you need to pay for childcare?
If you apply this method you can get a good idea for how much money you should be looking for in your policy.
Beneficiary
Your life insurance beneficiary is the person to whom the proceeds of the life insurance policy will be paid to in the event of your death. When you are choosing a beneficiary make sure that you do not name a minor or even your estate as the beneficiary as children may not be able to receive funds, and your estate may face tax implications.
Alternative Options
A life insurance policy is about more than just getting a pay out after your death, it can be added to your financial portfolio and it can also be used as a long term savings plan which will mature. Investing in a life insurance policy is about far more than basic cover and many companies will offer additional benefits as part of their life insurance cover.
Speaking With a Pro
Once you have worked out how much money you need, how long you need the plan for, what additional benefits you’d like and who your beneficiary is, you are ready to choose a plan for you. When you get to this point it is highly advisable that you contact a professional in this field who will be able to give you the best advice around what life insurance policy to select. Using an expert will make sure that you get the best policy and they can be on hand to answer any queries which you may have.
