Calculating the Best Term Life Insurance Rates

Let’s face the truth: we do not pay life insurance the attention it deserves. Many of us avoid our own mortality. Life insurance is an important component of sound financial planning and is something which can’t be ignored. During countless discussions with clients regarding life insurance there are certain themes which emerge again and again.

Some of them concern cash value, term or type of policy most appropriate for a given situation. Many people are quite uncertain about the term life insurance rates or the amount of coverage sufficient for them.

People can go blank when asked a very simple question: “For how long will your family be financially secure if you die?” In several families the topic of life insurance is considered  taboo. As per a recent study, almost half of married couples rarely or never discuss family finances in the event of their deaths.

This deserves an open discussion. For people who are anxious to secure their life and that of their family but have issues getting started, here is a look at some common anxieties that people have, and their solutions.

1. How to calculate the required coverage?

As a rule-of-thumb, the coverage should be around seven to ten times your annual salary. It’s best to analyze your own personal requirements. You can get a good idea using the numerous online calculators. It is better to dig deeper and consider several variables before finalizing term life insurance rates.

First consider one-time expenditures such as burial and funeral. Add outstanding debts and readjustment expenses related to shifts in housing, child care or medical insurance. Next consider your dependency expenses, and the daily expenditure for your children until they are self-supporting. Last, but not the least, consider the  lifetime income for your surviving spouse.

2. Who should be involved in this discussion?

Purchasing life insurance is a selfless act to protect your family’s future. People who will be affected by the policy should form part of the conversation and understand the complexity of the coverage. It is more productive to do some homework  before you sit down for a conversation. Your spouse, other family members and adult children should be particularly involved.

3. When to purchase life insurance?

When everything is good in our life we generally do not think of insurance. When some  incident occurs, it often triggers us to purchase life insurance. This includes illness, accident or chronic disease. Bear in mind, purchasing insurance early in life will provide you better options and at lower term life insurance rates.

4. Do I need to re-visit my existing insurance plan?

An insurance plan is not a onetime decision. Just like any other investment option, life insurance should be reviewed on a regular basis. Term life insurance rates that are best for you now may not be so five years from now. Your financial situation may improve and you may wish to invest more.

5. Where and how to find the best term life insurance rates?

Insurance coverage can be gained through a variety of ways. You can start by asking for referrals from people you trust. If you are working for an organization you can obtain coverage at your workplace. If the coverage provided by your company does not suit your needs, you can consult a financial professional. Insurance contracts can also be purchased online. Just make a thorough investigation before you sign one.

According to a study conducted by a reputed insurance company, almost 60 percent of respondents didn’t calculate their needs while purchasing insurance coverage. To get economical term life insurance rates along with enough coverage for you and your family, you must have all the facts.

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