Easy Steps To Take In Life Insurance Planning

One of the most overlooked types of planning I find today when working with people is planning for financial hardship due to death of a loved one. For one thing, it is a topic that most people don’t enjoy talking about it. However, it might the most important. There are few things more tragic then the combination of death and financial hardship. It is a tough combination to overcome.

Fortunately, planning for this financial hardship on a basic level is pretty easy to do by following these next few steps. The first step is to determine the amount that you might need. Just answer the following questions:

Do you want to pay off a house or any other debt?
Do you want to replace an income? If so, for how long?
Do you want to take care of college education for the kids?
Are there any special needs that require additional funding?
Are you responsible for elderly parents?

Once you have the total amount, subtract out the value of any current investments or savings that might also be used in the event of a death. For instance, you would want to subtract out any money saved back for college education funding or any money saved in just a general education account.

Now that you have a net number, you know how much life insurance that you will need. There are all types of life insurance programs available. I would go with term. It is the cheapest insurance available and you should be able to cover your entire need for a good value.

The rule of thumb is to lock in the amount of the insurance for as long as possible. For instance, 30 year term would be preferable. You know that for 30 years, the cost is fixed.

Finally, go and get quotes from at least five companies. This will allow you to shop for the best rate. However, there is one word of caution about looking for the best rate – make sure you consider the quality of the life insurance company.