Life Insurance Tips

Discover...

Why life insurance is critical to your loved ones
How you determine the right amount to buy
How you choose the best type of policy
How you prevent being conned by unethical agents

Life insurance is the most misunderstood financial planning tool you will ever encounter. It also happens to be the essential foundation to your family's future.

It can be difficult to justify paying the premium because you can't see or touch anything... like you can with a new car or new dress. Let's face it, you won't even be around when the real value appears.

Which brings us to the only reason you should buy life insurance... and that's because you love someone.

Never buy it as an investment... because it was never designed to be an investment.

Don't buy it as an education fund... because there are better ways to save for college.

Forget about using it to supplement your retirement... because that's an impractical recommendation.

An intelligently purchased life insurance policy is the only way for the average breadwinner to absolutely flat-out guarantee financial security for their loved ones.

Most people are not financially independent. In fact, most people inherit debt when their loved ones die.

Not to mention the loss of that loved one's income... which is so desperately needed to preserve the family lifestyle.

How Does Life Insurance Work?

Life insurance is tax free cash that is guaranteed available at the very time it is needed the most.

When applying for a life policy you designate a primary beneficiary. As policyowner, you have the right to later change this designation if you choose to do so.

The premium you pay is pooled with thousands of others who have purchased the same type of protection.

The insurance company determines the amount of risk it is willing to take based on a carefully calculated life expectancy formula.

This process helps the life insurance company predict if it will collect more in premium than it will have to pay out at any given future time as claims are paid.

Each company is required to have sufficient cash reserve on hand to backup the amount of anticipated ongoing liability.

The company can't predict the exact time of your particular death, but it does know - with reasonable certainty - when any number of people similar to your statistical make-up will die. Life policy premiums is based on:

the expected mortality experience of a specific company,

the anticipated operating expense of that company, and

the projected earnings for that particular company.

Insurance companies are judged by rating agencies like:

Moody's Investors Service,
Standard & Poor's,
A.M. Best Company,
Fitch, and
Weiss Research.

TIP: Make sure you know exactly how your company is rated. Just because it might have a well-known name doesn't mean it's financially sound.

Here's more helpful advice about choosing a life insurance company.

How Much Do You Need?

Unfortunately, there's no easy answer because it depends on a number of things.

For example, how do you determine the human lifetime value of a husband, wife, mother or father?

Tough question isn't it? Well, think of it this way...

If you died today, how much money would your family need right now to pay your debts and continue
to enjoy their current standard of living?

First, itemize all of your debt obligations - to include your mortgage if you have one.

How much of this burden can your loved ones handle when you're gone?

Second, what about your lost income?

How much in current dollars will disappear when you die? How much in future dollars?

What type of education do you want for your kids? If you live to a ripe old age you might be able to fund the schooling out of your earned income while you're alive.

But, can your family afford to pay for this without that income?

And what about household emergencies? Will there be enough savings for your family to dip into when the car breaks down... or the frig needs repair?

What's The Best Policy To Buy?

No one likes to consider their own mortality. But for the moment, imagine you are no longer in this world. For whatever reason... you're gone.

Do you think your loved ones will really give a rip about what of type of insurance policy you bought?

Of course not. They'll simply be eternally grateful to you for having a policy that takes care of them when you no longer can.

Your job is to make certain your policy is still in force when you actually do walk out of their lives forever.

One way to do this is to buy a whole life insurance policy that will never expire as long as you have paid the premium.

But before you commit to purchase, make sure you understand how level term life works. Just be careful you don't buy a policy and then watch it expire before you do.

In addition, there are several other life insurance products available. These include universal and variable universal life.

Bottom line... there's no such thing as a bad policy type. Every life insurance policy is designed to pay a death benefit.

The problem is too many people don't understand what they bought. If you use a qualified life agent they can help you find the right plan for your particular situation.

If you don't already have a qualified life agent, you can access free information by using the following link that will ultimately provide you with professional advice and premium quotations.

Everything is handled securely and in complete confidence with no obligation whatsoever.

Instead of just getting a quick... and probably unreliable... quotation, you will receive personalized help with all types of life insurance policies.

This gives you maximum control and flexibility in understanding what is best for your personal situation.

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