Looking For A Life Insurance Policy?
To be guided on the decision of which life insurance cover you need there are some factors that must be considered.
Establish the cover amount you need. Those who are calculating without the assistance of an adviser can make use of this guide. For better explanation and calculation we shall not factor in inflation, time and money value.
Consider any financial obligations which must be remitted should premature death, unfortunate incident or permanent or semi-permanent disability happen. Those that in the list of what should be paid off include mortgage loan repayments, business or personal debts among others.
Are there dependants who used to be financially supported? Among them are children, spouses or aged parents. If such persons are there then they should continue to be supported and hence a plan this should be arranged. A 20 year support for spouse, kids and aged parents the annual amount is $20,000 and this is an example only given if the insurer has met his untimely death or been permanently or partially disabled. The sum assured needs is about $400,000 in case the money is needed at this juncture.
A person can take an insurance life insurance policy but if they are met with a mishap there could be need to find out if there was an undertaking to pay financial gifts. After the person who has taken up the insurance life cover is no more or is rendered completely disability they may have nominated some few people who they would like to be given a financial gift. Sometimes a contribution to a charitable organization. If there are financial obligations that were previously taken it is then all good to determine the insurance policy to take.
Income replacement is a tricky question and there are different versions. Whether the income growth rate has to be considered makes it an answer to a question that is not straight forward. It is important to first know the period of time that for when there has been income replacement and this should be the first thumb rule to be used as a guide. A ten year income replacement will be $500,000 going by if the salary is $50,000. Hence it will be possible to withdraw a total of $50,000 annually for ten years.
The market offers various insurance covers all of which are good but before you can decide on the one to take it is important to know the type of insurance cover that you need. Calculating the insurance premiums is through knowing the sum insured and coverage length and this is all good but ability to pay the premiums should be taken into account.
The above discussion is a pointer of the insurance market whose purpose is for general information and discussion. Seeking an insurance adviser is so that they can give insurance or financial advice.