Life insurance is one of the most important parts of financial planning for the future, but understanding about life insurance and buying the right type can be confusing. While it is necessary to rely on the experience and recommendations of your Idaho Select Insurance agent, it is also a good idea to do your own research. Here are 3 factors that you should consider before buying life insurance.
Why You Need Life Insurance
The majority of people want to plan for their family’s future and their financial security. Unfortunately, it’s difficult to think that part of this process includes ensuring that your loved ones are supported in the event of your death, a spouse’s death or the death of a parent. Life insurance provides protection is several different ways, such as helping with the funding of your retirement or paying for college educations or the mortgage in Meridian, ID. It is also one of the prime components of estate planning.
How Much Life Insurance Do You Need?
There are several factors that you’ll need to consider when deciding the right amount of insurance for you and your family. It’s also important to keep in mind that this may change as you age. It is essential that you understand the policies, purpose, benefits, premiums and ultimately the ideal insurance for your specific situation. A few things to consider when determining how much insurance is enough includes:
- If you still have a mortgage and the length of the mortgage
- The amount of money your family will need live comfortably should you pass away
- The cost for legal and financial assistance to manage your estate
- How your burial expenses will be paid
- Will your passing create an estate tax burden for your loved ones
Which Type of Life Insurance is Best for You?
Once you have to decide how much life insurance you need, the next part of the process is deciding which type is right for you. The options for life insurance include:
- Term life-which means the policy, provides protection for a specific period of years. If you pass away during the time period, the value of your policy will be paid to your beneficiaries.
- Whole life-a long as you continue to pay the premiums, a whole life insurance policy will remain in effect throughout your lifetime. Whole life insurance policies can often be used as collateral for a loan and in some situations; you can receive cash payments while you are still living.
- Universal life-universal life insurance also provides permanent life insurance protection, but if you can choose the amount of protection best suited for your family, you and/or your business. The amount of coverage can be increased or decreased as your needs change.
Keep in mind that the cost of life insurance premiums is based on various factors, such your age, tobacco use and your overall health.
Meridian, ID residents interested in purchasing a new life insurance policy or reviewing their current policy should contact Idaho Select Insurance.