More and more, people are debating the worth of life insurance. But it is one of the most valuable insurance assets anyone can have and one of the most stable/secure financial instruments to advance in the investment field. Life insurance can offer mortgage protection, as it can be used to pay off an outstanding mortgage balance after death. It can be an income replacement, if you and your significant other have made plans for the future based on two incomes, and one of you passes away unexpectedly. People also do not consider the costs of final expenses, with funeral and burial costs as well as medical bills, which will be left to their family to take care of. Life insurance can help lessen the burden of these costs. Finally, it can help be an investment in the future, such as for your children’s college expenses.
Once you have decided to buy life insurance, there are some things you should consider. All policies fall into one of two categories, whether they are term policies, or purse insurance coverage. You also have to realize that, as CNN puts it, “Insurance is sold, not bought”. Whole life policies are expensive, and many can’t afford an adequate face value which leaves them underinsured. But for the agents selling the insurance, they have a vested interest in pushing you to whole life insurance policies as these offer the highest commission and highest profit. But whole life insurance might not be the best route for you, and you should know that when the agent returns a quote to you it is built on guesses. Therefore, term insurance might be a more beneficial and cost effective purchase for you or your loved ones. You want to match the policy to your needs, such as for as long as it takes your dependents to leave the nest or for your retirement income to kick in.
Final tips when purchasing life insurance include buying when you are healthy, which generally means buying earlier in life – as early as you can once you have dependents. Also, always tell the truth on your application – you might be able to shade in the facts and get a lower price now, but in the long run it could hurt you if a claim is made, as the insurance company will likely investigate upon death and your policy could be voided.
Lock Insurance Staff 1/5/2012 3:08:00 PM
Don Westerfeld has been active in the field of Insurance and Financial Planning since 1997. Don grew up in Indiana later moving to Lakeland Florida where he continues to reside with his wife and children. When he’s not in the office you can find him enjoying the great outdoors. He has served on several charitable business and non-profit organizations and continues to provide guidance, advice and support to local charities.
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