Basic Guide to Life Insurance

I should have bought life insurance when I could have. Why didn’t we get enough life insurance before this happened? What are we going to do now? These questions face those who don’t properly address this important issue. Nobody seems to have the foresight to imagine what would happen if they were gone from their family’s picture. The sad truth is, there are more families under-insured than families with no insurance at all.

There are individuals out there who wait until a more convenient time to buy life insurance. What they don’t understand is that the clock is ticking. Age, weight, health condition, smoker/non-smoker, financial budget versus income- all these things are factors in determining the cost and insurability of a person. You are one doctor’s diagnosis away from being uninsurable at any age. If you qualify now, don’t wait to pull the trigger.

Also, there are those who have life insurance as a work benefit. While this beats nothing, most people do not die during their working years. To continue these policies after you leave your job is more expensive than contracting your own coverage, and most people don’t even bother to try. This means that when they reach the age when they really needed the coverage, it won’t be there.

Don’t believe me? Just ask someone who lost a spouse before their expected time. When most people think of this subject, they think of burial costs only. Some have the additional foresight to include paying off their debts. But are these the only things to consider when determining the amount of coverage to purchase? Not even close.

Here are a few other things to consider when buying a policy:
1. When someone dies, their financial input disappears from the family budget. The policy should have replacement income built in for at least two years. This will allow the surviving spouse the means to keep the bills paid without significantly altering the family’s lifestyle or selling off assets it took years to acquire. During this time, the survivor can increase their education and find a better paying career to help offset the loss of income.
2. Include money for your children’s future education. Most would agree that their responsibility to their children shouldn’t end with an untimely death. Make certain that the increased cost of college at the time it will be used is factored in to the amount allowed for.
3. Contact an agent. Insurance prices are closely regulated, and what additional costs might be incurred would be more than offset by their ability to help you not to leave out important considerations and structuring your coverage.
4. Know the difference between permanent need and temporary considerations. Buy whole life coverage for needs that will always be there even if you live a full life. Buy term insurance for needs that you currently have, but will not be a need as your situation changes through the years.

Remember, when everyone else comes to you with a bill in their hand, only your insurance agent will show up with a check.