You should complete a Life Needs Analysis to determine how much life insurance you need. As far as the type of policy, that depends on your budget and whether or not you want temporary or permanent life insurance. Temporary life insurance or Term Life is the least expensive. Permanent life insurance or Whole Life is the most expensive.
The amount and type of life insurance you need depends on what you want your life insurance to accomplish. If it is for a temporary need such as getting your kids through college or paying off your house, a Term policy is a reasonably priced way of getting that amount of coverage. If you want to pay for your funeral, a smaller, Whole Life or Guaranteed No Lapse Universal Life policy would be a better choice.
You should work with an agent you trust to consider your needs, and who will shop among multiple choices to find your best price for the best policy to suit those needs.
How much life insurance you need and what kind depends on a number of factors.
Life insurance plays an important role in your financial and retirement planning. Life insurance creates cash at death and can also offer tax advantaged growth. The first step is to clarify what you want to accomplish and if the need is temporary or permanent.
In a family situation, for example, you might want to replace your income, pay off the mortgage, establish an emergency fund, an education fund, pay fees and taxes at death and/or leave a legacy. In this situation, your advisor can help with the calculations. You can find basic calculators online to get you started.
In a business situation, you might want insurance to fund a buy-sell agreement, provide a buffer fund for the death of a key person or as an executive or employee benefit.
If your need is temporary, such as covering a short term loan, then a term policy is appropriate. If there is a possibility you may need permanent coverage in the future, you should check to see what conversion options to permanent coverage are available.
If your need is permanent, which means that you want the coverage to pay when you die, not if you die before the policy expires, then a permanent policy is appropriate. Whole Life and Universal Life are two types of permanent insurance. Permanent cash value insurance has tax preferred growth that you can take advantage of.
An independent insurance broker can help you find the right policy at the right price.
If you have further questions, or feel that I could be of assistance, please do not hesitate to contact me.
If you would like to work with a local life insurance broker, you could start with a Google search. For example, if you search for: life insurance broker Halifax or life insurance agent Halifax, my name, along with several others, will come up. You can use the same method to find a life insurance broker in your community.
President, Lane Independent Agency, Southern California
There is no one answer to this question, since it depends on your own variables. That is why you should consult with an experience insurance agent. I urge you to consider: are you married, do you have children, do they live at home, do they have college ahead of them, do you have a mortgage on your home? What is your income and is it expected to rise in the next several years? With these variables in mind, you should have anywhere from three to 10 times your annual income in total face value life insurance. And the only way to be sure it will still be there as you get older, is to buy permanent life insurance now. If you feel you cannot afford that, at least buy some of term and some permanent, and gradually increase the permanent as you can. Thank you. GARY LANE.
Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
The amount of life insurance depends upon your obligations and your commitment to those that you love. It really isn’t a matter of “should” or “ought,” the real question is “How do I want to be remembered?” So if you don’t mind leaving a family saddled with debt, don’t buy any life insurance. If you love your family buy enough life insurance that they will be debt free with enough income to make the terrible transition that will take place if you die prematurely.
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You should work with an agent you trust to consider your needs, and who will shop among multiple choices to find your best price for the best policy to suit those needs.
Life insurance plays an important role in your financial and retirement planning. Life insurance creates cash at death and can also offer tax advantaged growth. The first step is to clarify what you want to accomplish and if the need is temporary or permanent.
In a family situation, for example, you might want to replace your income, pay off the mortgage, establish an emergency fund, an education fund, pay fees and taxes at death and/or leave a legacy. In this situation, your advisor can help with the calculations. You can find basic calculators online to get you started.
In a business situation, you might want insurance to fund a buy-sell agreement, provide a buffer fund for the death of a key person or as an executive or employee benefit.
If your need is temporary, such as covering a short term loan, then a term policy is appropriate. If there is a possibility you may need permanent coverage in the future, you should check to see what conversion options to permanent coverage are available.
If your need is permanent, which means that you want the coverage to pay when you die, not if you die before the policy expires, then a permanent policy is appropriate. Whole Life and Universal Life are two types of permanent insurance. Permanent cash value insurance has tax preferred growth that you can take advantage of.
An independent insurance broker can help you find the right policy at the right price.
If you have further questions, or feel that I could be of assistance, please do not hesitate to contact me.
If you would like to work with a local life insurance broker, you could start with a Google search. For example, if you search for: life insurance broker Halifax or life insurance agent Halifax, my name, along with several others, will come up. You can use the same method to find a life insurance broker in your community.