Theo Thimou, clarkhoward.com
As we transition from summer to autumn, it’s a great time to do a financial checkup on your life.
To live a financially sound life, one of the most common things experts recommend is that you have life insurance.
Life insurance will pay the beneficiaries named by a policyholder in the event of that policyholder’s untimely death. It’s a way for a family to replace lost wages when an income earner dies.
Insurers have paid out $865 billion in claims since 2000, according to a press release from the American Council of Life Insurers. Some 75 million American families have a life insurance policy.
September is Life Insurance Awareness Month. In honor of the month, here are six things to consider when you’re thinking about getting life insurance.
What kind of life insurance do I need?
Clark recommends what’s called level term insurance.
“Level term” means you pay one flat rate year after year for the length of the policy. This policy will replace your income should you die prematurely.
You buy it for periods of 20 or 30 years and the premium stays the same during the life of the policy.
How do I shop for it?
By shopping online, you avoid an insurance salesperson trying to up-sell you from level term coverage to another insurance product that may be unsuitable for you.
Can I afford it?
Yes! One non-profit insurance industry group says that a healthy 30-year-old man can get a $250,000 level-term policy for 20 years at a cost of less than $13 a month.
That’s around $150 a year…and the price never goes up with a level-term policy!
How much coverage should I buy?
When it comes to the question of how much you should buy, people can get crazy with all kinds of complicated formulas. Clark says that you should buy six to 10 times your annual income.
Should I get it through work?
This is a popular option for a lot of people. But it’s often better to qualify on your own and go through medical underwriting so you can buy a policy independent of your employer.
The reality is most of us don’t stay at the same place forever and you may not have a right to take that insurance with you.
Do I really need it?
Does somebody depend on you? Do you have young kids or a spouse or significant other that depends on you financially? Then you need life insurance!
And don’t forget about stay-at-home spouses. Should a stay-at-home spouse pass away, the remaining parent would have to suddenly pay for childcare and everything else a stay-at-home parent does on a day-to-day basis. That’s why it’s essential the parent at home have a policy too.
Don’t have any one who financially depends on you? that’s the only time you don’t need a policy.
For more information follow this link, clarkhoward.com