As you may know life insurance is critical to your family’s livelihood. However, the concept of life insurance can be difficult to understand with so many different components. So, in this blog I will walk you through the 10 most important things you need to know about life insurance.
1. If you are relied upon financially you NEED life insurance
· You're almost obligated to get life insurance if you have a spouse or children who depend on you.
2. Life insurance doesn’t just apply a monetary value to your life
· It helps financially compensate your family in the event of your unforeseen death. It also will give you peace of mind by lessening the burden on your family.
3. Life insurance is a contract
· A policy is a contract between yourself and the insurance company. The insurance company makes money on the difference between premiums and claims paid out.
4. There are 4 primary roles in a policy
· The insurer (insurance company), owner (pays the premium) insured (subject of the policy), beneficiary (person, who will receive the death benefit).
5. Life insurance is about risk management not investing
· Investing in a life policy is never optimal for investment purposes. Better tools for this are 401k’s, IRA’s, etc.
6. There are 2 broad varieties of life insurance
· Term: A policy based on the probability that you will die in a 10, 20, 30 year stretch. Premiums are guaranteed for the length of the term.
· Permanent: Includes the same death probability but also savings. The policy is maintained throughout in perpetuity (forever).
7. Life insurance can be expensive or even inexpensive
· If you get all the different features offered this won’t be the case. However, a vanilla policy should give you the coverage you need and also result in lower premiums.
8. Determining the optimal policy doesn’t have to be complicated
· Life insurance can be in-depth so you want to focus on what you’re getting. A key is to multiply your wage by 15 and to come up with the policy you should take out.
9. Consider an agent to help with your death planning
· While there are online resources out there, dealing with the best and most experienced agents like here at Giggle will help you find the best policy for your situation.
10. Know your options when cancelling an existing life insurance policy
· If you determine your policy is no longer appropriate you want to be cautious. Its best to get a new policy in place before cancelling and leaving yourself out to dry.
While these 10 things can help you better understand life insurance they don’t guarantee that you will get the best policy. That why here at Circle285 we provide you with the most experienced insurance agents in the business to help individuals just like yourself. Be sure to get a quote today.
Ted Jenkin is a frequent guest columnist for the Wall Street Journal and Headline News Weekend Express. He is the co-CEO of oXYGen Financial. You can follow him on LinkedIn @ www.linkedin.com/in/theceoadvisor or on Twitter @tedjenkin.
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