What You Should Really Know About Life Insurance
It’s more important now than ever to provide a solid life insurance policy for friends and family members in the case you should pass away unexpectedly of your passing, according to Rene Lacape, Marketing Manager for eQuote Life Insurance, men and women of all ages are unaware that they don’t have life insurance, don’t like talking about life insurance, or are simply uninsured. .
“In considering if you should have life insurance, how much life insurance and what type of insurance to have, it’s important to look at your life situation carefully and realistically,” Rene Lacape, said.
Who Needs It?
If you have anyone, including older parents, who depend on you for support, it is necessary to have life insurance. Additionally, if you work at home where you do child care, cooking or cleaning that would have to been done for hire if you were gone, it is important for you to carry life insurance.
Rene Lacape said that too many individuals believe they are adequately covered by the policy their employer may offer but the coverage is generally not adequate to protect family members who would be left behind if you die.
Retirees often imagine that they do not need life insurance, said Rene Lacape, but its actually important for them to consider what might happen if one spouse died following a long illness that depleted the couple’s retirement savings.
Wealthy individuals may also brush aside the need for life insurance, without considering that their heirs may be stuck with substantial estate taxes, or may need assistance in keeping the wealth intact for future generations, added Rene Lacape.
Types of Life Insurance
“There are literally several different types of life insurance, the most popular and most affordable is term life insurance,” said insurance agent, insurance agent Rene Lacape. This popular version of life insurance is generally written for a period between 10 and 30 years. It is often, but not always, renewable, and becomes much more expensive for older individuals.”
A term insurance policy with a declining balance has the same premium throughout the life of the policy, but the value of the benefit declines over time. Some individuals buy this type of insurance to match the amortization schedule on their mortgage.
Rene Lacape continued saying, “There are other types of investment/insurance products such as whole life, universal life, variable life, and universal variable life, each with varying risks and benefits, and each carrying an investment component instead of the ‘pure insurance’ of the term policy.”
Rene Lacape said choosing between the different types of insurance can be challenging. “It’s a great idea to get the advice of a professional when making that decision.”
How Much?
The final question many face in determining what to do about life insurance is how much they should purchase. This question can be tricky, but there are some considerations to make.
“First, said eQuote’s Rene Lacape, a person should look at the annual income after taxes (life insurance benefits are generally not taxed). Add up all personal expenses, which will let you know how much your life insurance will need to replace in the lives of your family . Then add in amounts to cover lump sum payments for college tuition or paying off a mortgage.”
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