Thinking about death is not pleasant but if you have others depending on you, you can’t help staying away from imaging them living in your absence. Along with the emotional loss and heartbreak, your absence could also affect your family’s lifestyle and your children’s future.
Do not worry too much about the future. Because now you can protect your loved ones, even after you are gone. All you need is a good life insurance policy. Well, nothing can replace you. But insurance can surely offer some sense of security. However, choosing the right one can be tricky. There are professional agencies like affordablelifeusa.com that offer life insurance in all 50 states. They can indeed help simplify this process. Here are a few steps to find an affordable life insurance policy.
Step 1: Decide on an Amount
There are a number of things to be taken into consideration while picking a life insurance policy- do you have any debts, is your spouse working, how old are your children, what do they want to do after school and so on. It is always better to buy a little more insurance than you think you need. This is because with every year that passes the cost of living goes up and so will your income. Multiplying your current income by ten is the simplest way of calculating the minimum amount of insurance you need. A better way to calculate this amount is to calculate the sum of all your debts, an estimation of your children’ college education costs and the amount arrived at by multiplying your current annual income with the number of years your family would need to be supported for.
Step 2: Decide on the type of insurance you need
Insurance can be broadly categorized as term policies and permanent or whole policies. Term insurance can be purchased for a fixed number of years and the beneficiary named will be paid only in the event of your death if it happens while the policy is still in effect. This is the most affordable type of insurance policy and can be renewed at the end of each term. Whole life insurance has no time restrictions and pays your beneficiary death benefits as well as a cash valuation of your policy depending on the return of your investment. This is more expensive but also allows you to borrow a portion of the money if needed while the policy is still in effect. Remember that if you do not pay the premium your insurance will lapse and hence term insurance is usually preferred to whole life insurance.
Step 3: Decide who your beneficiary will be
A beneficiary is a person who the insurance company will make the payment to in the event of your death. When putting down a beneficiary do not simply mention your relationship with the person but spell out their whole name. This helps prevent ambiguities at a later date. If you name your children as beneficiaries, it is best to put an adult or a trust in charge of the money they will receive till they reach the age of 18 years.
Step 4: Keep People Informed
Once your life insurance policy is in place, you need to tell your spouse and other family members about it and where the relevant papers are kept. This way, you are sure that your insurance proceeds will not go unclaimed.
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