Basics Of Life Insurance
LIFE INSURANCE
Basics Of Life Insurance
The purchase of Life Insurance is one of the most important decision that one makes in his/her lifetime.When one doesn't care about owning a Life Insurance he/she is making a big mistake.
When one doesn't have a Life Insurance
* Family Suffers
* Businesses Fail
* Dreams get derailed
The 3 Key Questions about Life Insurance is ...
1) Do i need Life Insurance ?
2) How much do i need ?
3) What kind should i buy ?
Why Do I Need Life Insurance ?
* One needs life insurance when someone is financially dependent on them.
* Life Insurance provides support for spouse,children and aging parents.
* Life Insurance protects business,business partners and employees.
How Much Do I Need ?
* Some experts recommends that 5 or 20 times the annual income would be appropriate.
Three Types Of Expenses
1) Immediate Expenses
* Funeral Expenses.
* Uncovered medical costs.
* Mortgage and other debt taxes.
* Estate settlement costs.
2) Ongoing Expenses
* Food
* Housing
* Utilities
* Transportation
* Health Care
* Clothing
* Insurance
3) Future Expenses
* College
* Retirement
What kind of Life Insurance should i buy ?
Type depends on
* How long coverage is needed
* Your budget
Types Of Insurance
1) Term Insurance
2) Permanent Insurance
Term Insurance
Pros
* Good for temporary needs.
* Affordable
Cons
* Cost increases with age
* Must re-qualify when term expires
Permanent Insurance
Pros
* Lifelong coverage
* Premiums are often level for life
* Accumulates cash value.
Cons
* More costly than term when initially purchased.
Business Uses Of Life Insurance
* Fund a buy-sell agreement
* Buy time to replace an owner or key employee
* Equalize an inheritance
* Pay estate taxes
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