Determining the right life insurance policy to purchase is a product suitability question. Life insurance has two options: term and permanent. If your financial liabilities, future obligations and charitable intent are temporary, then buy term life insurance. But if they’re permanent buy permanent life insurance. But the total amount of these items can determine your amount of coverage.
Term life insurance is generally offered in five year increments like 5, 10, 15, 20 and 30 years. Permanent life insurance can cover you to age 121. Permanent life insurance is offered in five types: Participating whole life, guaranteed universal life, current assumption universal life, indexed universal life and variable universal life. You’ll need to determine your planning model for life insurance. Is it for protection, tax advantages income or next generation use? And in addition is your risk tolerance.
The amount of life insurance that is right for you will vary from person to person. I had a middle aged woman explain to me today that $25,000 was perfect for her, and based on her reasons, I agreed. The next woman her age might need $2,500,000 to replace her income and take care of obligations left behind.
To determine the right amount for you, call or visit with an experienced life insurance agent. No one likes to do it, but talking to a wise agent can save you a lot of money and help you avoid the pitfalls that many people run into when buying life insurance.
Insurance Adviser - Broker, SC Insurance Services, Oahu, Hawaii
That is a GREAT question! The "twin" question to "how much is right", is: "Which KIND is right". There are more than 10 types of Life Insurance: at least 3 kinds of "Term" insurance, and at least 10 kinds of "Permanent" insurance. Which kind is right for you depends on your goals and needs. That would include your family situation, your financial situation, and what and who you want to benefit. Then when all that is determined the amount of benefit can be determined.
A kind of "rule of thumb" - taken completely out of context with all the other variables is about 8 to 10 years worth of your annual income. But in reality each situation is unique to the individual client. That's why personally I take an Education and Fact Finding approach to advising my clients on which kind and how much insurance to implement.
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Term life insurance is generally offered in five year increments like 5, 10, 15, 20 and 30 years. Permanent life insurance can cover you to age 121. Permanent life insurance is offered in five types: Participating whole life, guaranteed universal life, current assumption universal life, indexed universal life and variable universal life. You’ll need to determine your planning model for life insurance. Is it for protection, tax advantages income or next generation use? And in addition is your risk tolerance.
To determine the right amount for you, call or visit with an experienced life insurance agent. No one likes to do it, but talking to a wise agent can save you a lot of money and help you avoid the pitfalls that many people run into when buying life insurance.
A kind of "rule of thumb" - taken completely out of context with all the other variables is about 8 to 10 years worth of your annual income. But in reality each situation is unique to the individual client. That's why personally I take an Education and Fact Finding approach to advising my clients on which kind and how much insurance to implement.