What Do You Want; Just Death Benefit At Cheap Life Insurance Rates Or Something More?

Most frequently asked question to the life insurance agent is; should I buy term life insurance or should I buy permanent life insurance. Most life insurance agents will never give you the answer to this question right away because there is a lot of analysis to be done before they recommend the right kind of life insurance for you. When asked this question, the life insurance agent will do something called as the needs analysis. This simply means that he or she will find out more about your needs and then decide on the type of insurance. Before you buy a life insurance policy, try to solve the above dilemmas. Both of them are very crucial and need lots of calculation and deliberation before one can reach any kind of conclusion. Ideally, one should go through needs-analysis to solve the first one, i.e. whether one should buy a term life or a permanent life insurance policy. However, needs-analysis will require you to submit many personal details that you may not be very keen to share with strangers. Then how do you decide on the type of life insurance policy that you should buy? There are other ways to do it. Buying insufficient life insurance coverage without any financial calculations may lead to major financial crises after you are gone. If you don’t want to disclose your financial assets to the life insurance agent or broker, then there are various other ways of arriving at the correct face value. One of the ways of doing the needs analysis is by using a needs analysis tool. This needs analysis tool is a software application that takes all current key financial data and then does a calculation based on certain predefined formulas and gives you an accurate face value. Most people get totally confused when they have to decide on the exact amount of the life insurance. In you are a very young parent and you have three to four kids, you will need lots of life insurance coverage and be prepared to give out a huge sum in terms of premiums. As a parent, you will want to give maximum coverage so that your family does not suffer when you are gone and at the same time, you will want to get the cheap life insurance rates. These needs-calculators are software applications, which use various inputs like your yearly income before tax, percentage of income needed by your family along with various other factors like your age and the coverage term, annual inflation and annual interest rates etc. You can also use the rule of thumb, which says that you must multiply your monthly income before tax by 200 or your yearly income before tax by 15 to reach the magic figure. Now, why should we put so much stress on the face value? The death benefit your family is going to receive is actually the face value of the policy and since term life provides nothing but death benefit, term life insurance rates are quite reasonable in comparison to the permanent life insurance rates. Another reason behind the low term life insurance rates is that the term life pays death benefit only in 1% of the cases. In 99% of the cases, the policyholders outlive the policy and so do not receive any benefit from the carrier. Frankly, this is one more reason why those who can afford the higher life insurance rates of the permanent life insurance, opt for it. Some life insurance companies may offer you a discount when both the parents apply for life insurance policies. However, don’t expect a huge difference in the term life insurance rates. When you buy the life insurance policies, typically, you will get a hard copy of the life insurance policy. When you get the hard copy of the life insurance policy, the first thing that you must do is to read the life insurance policy very well. Check to see if all what was mentioned by the life insurance agent is there on the life insurance policy. Another way of reducing the life insurance rates is to apply for joint life insurance policy. This of course falls under the gambit of permanent life insurance policies. However, if you really want to buy the maximum coverage at minimum rate lead a healthy life, stop smoking and be health conscious. Other than that, fill up the quote form accurately and honestly. Read the fine prints and if you have any doubt, get it cleared. Once you receive the hard copy of the policy read it carefully. Note down the life insurance number, mentioned on the document separately and then put it away safely. Do not forget to let your beneficiaries know about it. They must put in the claim to receive the benefit.

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