Looking For A Life Insurance Policy?
These factors discussed here below can be used to assist you on the type of life insurance cover that you might need.
Establish the cover amount you need. Those who are calculating without the assistance of an adviser can make use of this guide. For better explanation and calculation we shall not factor in inflation, time and money value.
Establish first if there is a financial responsibility that should be paid off in case of either premature deaths, total or permanent disability, or any unfortunate incident. These could include loan repayments of mortgage or personal or business debts or loans that should be repaid.
Are there dependants who used to be financially supported? Aged parents, kids or a spouse are all in this category. If such persons are there then they should continue to be supported and hence a plan this should be arranged. One such example could be when a person has purposed to support their children or aged parents for a period of 20 years the annual amount being approximately $20,000. The sum assured needs is about $400,000 in case the money is needed at this juncture.
A financial gift is the sum of money that a person might feel obliged to give in case they meet with an unfortunate incident. Sometimes there are people who would like to give some financial gift when they are deceased. Sometimes a contribution to a charitable organization. If there are financial obligations that were previously taken it is then all good to determine the insurance policy to take.
To tackle income replacement you notice that there are tricky questions on this issue. Whether the income growth rate has to be considered makes it an answer to a question that is not straight forward. However there is a thumb rule for this and that is it is important to know the number of years that your income is to be replaced. By example, if the income replacement is ten years, the sum assured will be $500,000 that is if your current salary is $50,000. Hence it will be possible to withdraw a total of $50,000 annually for ten years.
The market offers various insurance covers all of which are good but before you can decide on the one to take it is important to know the type of insurance cover that you need. Calculating the insurance premiums is through knowing the sum insured and coverage length and this is all good but ability to pay the premiums should be taken into account.
The above discussion is a pointer of the insurance market whose purpose is for general information and discussion. An insurance adviser should be sought so that they can offer financial or insurance advice.