Life insurance is a must for three important areas of your life that can be most affected by money – retirement, disability and death. With an insurance policy in place, your family can continue to live in the fashion they have become accustomed after you die. Your business will not be affected due to lack of money. On the other hand, if you are alive but became disabled, you will be able to live the same lifestyle as before.
The main goal of insurance is not to make you rich, but rather to make sure that you and your family are protected in the case of a financial emergency. Life insurance policies provide for a stipulated amount of money to be paid to their designated beneficiary. After an insured person dies, the death benefit is paid to the beneficiary noted in the policy.
There are many methods you can use to determine how much insurance you may need. What makes insurance a requirement for the long-term is the need for present-value living money. If you get sick or hurt, you will lose the opportunity to live in the fashion you were used to unless you have enough money to generate a steady stream of yearly income for the rest of your life. When you wish to slow down, your present-value money may no longer satisfy the needs of your future. This is where “sending money ahead” comes into picture. Life insurance is one way to build up savings for your retirement.
When you choose an insurance company or an agent, you should use the same techniques you use to select a dentist, lawyer or an accountant. First, get a recommendation from people whose judgment you trust. Second, read publications such as newspapers and magazines for articles on life insurance and select an agent in your local area, since the rules for life insurance can vary depending on where you live. Third, trust your own gut feelings about whether or not you can have faith in the company or the agent.
Buying an insurance policy is not similar to buying a commodity. The bottom line is that it is essential that you have exactly what you need. If you can afford that exact amount on the insurance policy of your choice, then that policy is your best choice. Make sure that your insurance agent or any person who offers the insurance product understands the terms, and equally important, is able to calculate the rate of return. Maintaining complete control of your insurance means you have the control over the ownership of the policy as well as the right to designate your own beneficiary.
Steven Dallar is a financial planning expert and blogging enthusiast who has been helping his clients and readers plan for the future for years. He recently came across First Financial Group’s insurance plans and services, and was extremely impressed by what they had to offer. He highly recommends their website, http://www.firstfinancialgroup.ca/services/insurance-planning/, to anyone looking to delve further into the crucial importance of life insurance.