Freedom Life Insurance Clears Up A Confusing Insurance Market
When it comes to life insurance, there are many myths and misconceptions out there. Some finance professionals are of the opinion that they are mandatory to ensure future financial liberation, while some are of the opinion that life insurance is simply a good to have, and not a must have. Whether you choose to side with one side or another is entirely up to you. However, you need to understand the following fundamental principles about life insurances and how they work in order to make a more informed decision.
Freedom Life Insurance recommends that emotions should be taken out of the decision on whether to take out a life insurance or not. Given, you may have a spouse who loves you dearly. Though talking about issues such as what will happen when one spouse dies is not always welcome, it is advised as having such talks sets in motion a plan that shoulders the family should it be bereaved. Should a husband who is a bread winner for example pass on, the housewife would not have to hustle around to look for a job as her and her family’s financial future would be secured. Freedom Life insurance says that this decision should never be that sixth thing on your endless to do list. If you are reading this article then there is a very high chance you intend to take out a life insurance policy and probably just need more details on the things to consider and the potential loopholes to avoid.
Things to note
Like any other financial solution, it is important to understand how life insurance policies are set out, what triggers them and how they are administered.
1. Do you really need life insurance?
To answer this, you need to look at how your finances are structured. Do you have a dependent who relies on you fully for financial support? What happens to them when you are no longer able to provide for them due to your sudden demise for example? Dependents are more often than not going to be affected directly when the person providing for them is no longer able to for one reason or another. Life insurance protects against such a situation ensuring that your income will be replaced by a monthly payout once you are no longer available to provide. This means that very wealthy people have the option of not getting life insurance as their wealth in their possession will most probably be enough to cater for the dependents after the principal member dies for example.
2. How much do you have?
Many employees are not usually aware of the fact that some of their employers have group life insurance plans. The value of such policies is usually only about twice or thrice your annual salary. Though the value of such insurance plans may not be handsome, it is always a good place to start with as the payments against such plans are usually made by the employer thus lowering the financial burden on the employee.
3. How much do you need?
The amount needed is usually a customizable figure. It depends on the needs of a particular family. As a general rule, it is always prudent to plan with 10 times your annual earning so as to ensure that the financial freedom of your people is secured for the foreseeable future. The younger your children are, the more you need to set aside for them as they will need more money for their education and upkeep. The older your dependents are, the lesser you need to have in place for them. To be safe, look at it in terms of replacing one income with another. If the husband retires and the wife can take up a job to feed the family then well and good: you do not need a life insurance policy. Always factor in assets in your possession while doing the tabulation. Use bank rates as a guiding principle to determine this amount to be on the safe side. There are also multiple online life insurance calculators that note a few metrics and use them to estimate how much money your family may need in the long run. The beauty about policies is that you can always tweak them and adjust them to better suit your needs down the road.
4. Buying a life insurance policy
Should you decide to take out a life insurance policy, then you need to consider a couple of things:
a). The cost of the policy: High commissions and costs should always be a red flag as such would affect the cash that would be accumulated at the maturity of the policy
b). Cash accumulation: this is value of the policy at maturity. It should of course be informed by how much your dependents would need to survive comfortably.
c). Term of the insurance: always tailor make a life insurance policy while considering things such as your personal health and your family’s financial health. Death benefit for example is not given after the term of the insurance has passed. Considerations should be personalized depending on one’s particular situation.
Generally speaking, whole life insurance is usually more expensive than term insurance. If life insurance is new to you, start out with term insurance then as the whole concept becomes familiar to you probably consider taking out a longer time life insurance such as a full-term life insurance. Plan around anticipated expenditures such as college funds needed for you son who is still at kindergarten. The earlier you star the better as longer periods result in amounts being spread out and thus lower premiums being paid. If you are wealthy, you may still consider taking out a life insurance to buffer your dependents from estate taxes imposed by the government and local authorities when you die. It is advisable to get several quotes from different insurance providers and pick out the most appropriate for your situation having considered all their terms and conditions and not just relying on cost. Remember, for insurance, the details are more often than not hidden in fine print therefore be careful and read through the policy documents thoroughly .
For more on Freedom Life Insurance, check out their website here: https://provider.ushealthgroup.com/
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