Life insurance is an important financial tool protect the ones we love. Below is an article I thought would be helpful for you and your family.
When young married couples start a family, a more than common occurrence in Arizona, their entire world changes, and suddenly priorities shift with a decidedly long-term perspective becoming the norm.Eventually, the topic of life insurance reaches the radar screen and must be addressed.Discussing the possibility of one’s passing is never an easy conversation.Although Arizona has one of the lowest mortality rates in the nation, we know that we cannot live forever.Providing for our family’s peace of mind in case an untimely death should ever happen is a responsibility that should not be taken lightly.
Life insurance premiums are highly dependent on your age and health, suggesting that the best time to buy long-term policy coverage is when you are young and healthy.The obvious reasons for having the coverage are to cover outstanding debts and provide a level of regular income to sustain your family’s current lifestyle.With children under your roof, your needs assessment should also include potential educational expenses that may seem today to be far off in the future.How does one prudently provide for these expenses with life insurance?
There are various forms of life insurance, but the two primary ones are term and permanent life.The latter type includes a savings feature combined with low-cost term life coverage, but it is rarely recommended for young couples that have many demands on their household budgets.A savings plan can be dealt with separately, leaving term insurance as the appropriate vehicle to provide for the unexpected.Cheap insurance rates abound in the market from reputable companies that can easily range from $7 to $25 per month for a $250,000 term policy.
What is the correct amount of coverage to buy?There is considerable advice that can be found for answering this question, but for young families, most advisors suggest that you begin at $1 million of coverage and work your way up from there.If this level were used as a gauge, then the majority of families would seem to be under insured, but this amount would provide a month annuity in the range of $5,000 or more, much of that exempt from taxation.Depending on debt load and future needs, like education for example, you may want to plan on getting additional coverage.
Providing for future educational costs also requires an estimation of what that applicable figure might be.A four-year program at a small community or state college may range from $12,000 to $40,000 today, but if you prefer to plan for one of our leading universities, the tuition costs can escalate to the $150,000 level.There may also be additional costs for books and living expenses, and we have not even mentioned inflation over the next 15 to 20 years.As it turns out, the $250,000 figure that we alluded to above may be the best target for now to set as your separate savings plan goal, as well as your level of term life insurance to acquire in the market for this purpose in case of your untimely death.
Should you start calling insurance companies today?Many will advise you that this is a waste of time at this stage.Internet search services offer the best way to access several term life insurance quotes in a short period of time, especially if you are interested in finding the cheaper life insurance rates that prevail in the market today.It is important to remember at this point that premium quotes are merely estimates.Insurance companies tend to lead with their “preferred” or best rates.Your final premium will be determined based on your detailed personal information, a medical exam, and the company’s proprietary investigative review.
The quote process will point you towards the “best of breed”, but time an effort on your part should follow to review alternatives for financial soundness, good customer testimonials, and favorable policy documentation.Since you will be looking at term policies of 20 years in length, you will want to make sure that your insurance partner is stable and highly probable to last for decades to come.There are several rating agencies that can help with this task, but “Weiss Ratings”, the agency acquired by TheStreet.com, is often cited as the best in their rating competencies.
When married couples contemplate buying life insurance, a number of reasons must be considered.Is there a home mortgage or other debts to address?Are there sources of income that will continue to provide for basic living expenses besides debt obligations?Lastly, the education of your children is a common need that can easily be overlooked.Take the time to study the issue, seek out numerous quotes, review a small group of final alternatives, and then decide on a prudent course of action.