Buying a life insurance policy means different things to different persons. When it’s time for you to buy life insurance, the first thing you need to do is to set your goals. Why do you need life insurance coverage’ Do you just want to make it easier for your executor to bury you’ Do you want to leave your family an income’ Many people use whole life policies as a tool for planning for big expenses, such as college, retirement, or just retiring debt in case of death or disability. Think about what you need your coverage to accomplish before you decide which kind of policy is right for you.
Second, you need to thoroughly examine your budget. Make sure you can afford life insurance. Figure out how much you can spend on premiums. Term life insurance tends to be cheaper. Those with temporary needs like a mortgage and child rearing expenses may find term insurance to fit their needs from both a goals and financial perspective. Others find that a permanent, whole life policy fits their needs, while others opt for a combination of term and whole life insurance policies. Whatever life insurance coverage you decide upon, make sure it fits into your budget as well. A qualified life insurance provider can discuss options with you.
Third, don’t forget that your life insurance needs to protect your real earning power, and that is more than just your salary. If your family would have to buy its own health insurance after your death, for example, or even if you think it’s likely your employer would drop their coverage in the future, be sure to include this cost in your life insurance figure. You probably also want to calculate 3 per cent inflation (at least) into the figure that will provide for your family’s needs. Be realistic so that you select the amount of coverage that really meets your family’s needs.
Finally, ask yourself this question: what stage are you at in life’ Different people have different needs, depending on where they are in life. You might need a policy to simply provide a death benefit. If you have people dependent upon your income, then you need to think about making sure your income is replaced in the event of your death, devastating illness or accident. If you need more income for retirement, take that into consideration when mapping out what type of life insurance policy is going to help meet your needs.
Sit down and make a list of your goals, your budget and your earning power. Think about where you are in life and what you want to accomplish. Once you have these ideas mapped out, then you can decide on what life insurance product is right for you.
Tom Martens is the content syndication coordinator at Lifeinsurance-Southafrica.co.za South Arica?s leading Life Insurance and Life Cover portal.
categories: Life Insurance,Life Cover,Disability Cover,Death Cover,Money,Personal Finance,Family
