How To Buy The Right Life Insurance
Very often people hear they need life insurance, but they just don’t know why. Clients often shy away from buying life insurance to protect their assets and their loved ones because they feel the monthly premiums aren’t affordable. In fact the exact opposite is true.
The question to ask yourself when buying life insurance isn’t “Can I afford it?” the question to ask is “Can I afford not to have it?”
Here are four questions to ask your financial advisor to help you buy the right life insurance:
Why do I need life insurance?
Life insurance is a valuable financial product that fits into an overall financial plan and compliments other strategies such as retirement savings and keeping an updated Will. If you’ve ever lost someone you know that dealing with financial issues may be the last thing on your mind while dealing with the loss of a loved one.
The proceeds from a life insurance policy can be used to alleviate the financial burden that comes with a loss of life such as covering the costs of outstanding debts, paying a final tax bill and covering the costs of a funeral and burial.
How much do I need?
This is a fantastic question and one I often hear from clients. Finding the right amount of life insurance is so important because if you buy too much insurance the payments are an unnecessary expense. If you don’t buy enough life insurance you can leave your family with a pile of debt after you’re gone.
If you are a business owner life insurance can also help protect the business interests in case of an unfortunate event.
Use this calculator to determine the amount of life insurance you need based on your current family situation, age and finances.
Can I afford the payments?
Once you calculate the correct amount of life insurance you can determine if you can afford the payments. You can calculate the cost of your estimated monthly premiums right here.
I think it’s safe to say that the cost of the monthly premiums is a small price to pay to provide your loved ones with the comfort of financial security when you pass away.
Who gets the money after I’m gone?
You can designate anyone as the beneficiary of your life insurance policy; you can also designate multiple beneficiaries. It’s important to note that the beneficiary does not necessarily have to be the same person that you name as the liquidator of your estate as per your Will.
These are all important conversations to have with a financial advisor when purchasing life insurance and planning your estate.
Published by The William Douglas Group Inc. on Nov 15, 2015