Choosing the Best Term Insurance - A How-To Guide

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Choosing the Best Term Insurance - A How-To Guide

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• There are so many types of life insurance
  policies, how are you to choose the best? Many
  things go into determining what is the best
  insurance policy for you and your family.
  Ultimately, you will need to talk with the broker
  who can understand the full depth of your
  financial situation to get sound advice. Here are
  a few things you may want to consider when
  looking and shopping for the best term insurance.

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• How Long Will You Need It?
• When buying term insurance policies you need to
  consider when you will no longer need your
  policy. If your plan is to use your insurance to
  cover any gap created by an early and unexpected
  death, then you only need insurance until you
  reach the age of retirement. You may reach your
  financial goals prior to the age of retirement.
  There is no need to continue paying for life
  insurance if you can self insure. What I mean by
  self-insure, is that you can cover any major life
  expenses and leave your family well off if you
  were to suddenly die.
• How Much Do You Need?
• There are a number of rules of thumb to consider
  here. If the purpose of the policy is to cover
  your income if you were to die, then you can
  calculate how much insurance you need. For
  example, if you make 50,000 a year and feel
  comfortable that with a conservative investment
  you could average 10 a year, then you need
  500,000 in term life insurance. Let me walk you
  through that. If you were to get 500,000 today
  and invest in a conservative account, would you
  make 10 a year? If so, then your yearly income
  from your investment would be 50,000. Do you see
  how this works?

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• What If I Stay Home?
• This is a great question. How do you estimate the
  value of someone who stays home? If you are a
  care provider for your children, there is a
  monetary value necessary to replace that service.
  Do not get me wrong, I am not saying to replace
  you, but to replace the childcare services you
  provide. The safest way of doing this is to find
  out what childcare cost in your area. A general
  rule of thumb, is that 40,000 per year would
  likely be adequate for your needs.
• That means you would need a 400,000 policy if
  you feel confident you can make 10 / year with
  it properly invested. This would provide 40,000
  a year to pay for childcare.
• What about Human Life Value?
• Human life value is when insurance agents want
  you to buy more insurance than you need to
  replace your income. The value of this for them
  is that they receive a higher commission for
  selling higher policy value. The sales approach
  is to say that you should replace all that you
  would make if you had lived. If this is important
  to you, then by all means consider getting a
  larger policy. However, if this is just a
  security blanket, not an investment vehicle, then
  save the money each month and invest it in
  something else.

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• Get the Best Value for Your Money
• When shopping for Best Term Insurance Plan it is
  important to look at multiple places. Not all
  insurance companies offer the same benefits, the
  same ratings, or have the same price
• Article Source http//EzineArticles.com/3171097

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