Life Insurance Lowdown

Are your heavy financial obligations like a big credit card debt or mortgage loan bogging you down? If yes, then do go out and get yourself a life insurance policy. I know this sounds a bit off, but just imagine if you were to… well, die and leave behind huge debts for your family to repay, they wouldn’t remember you too kindly. Also that will leave your family with a financial problem that may be too huge for them to correct and they may be forced to take some drastic actions. So, if your death would leave anyone in a financial bind, then you had better get serious about shopping for life insurance.

People with heavy financial obligations can use life insurance to ensure that their debt is covered. And because life-insurance death benefits are exempt from federal taxation, many financial planners use clients’ life-insurance benefits to help pay for the estate taxes generated upon the death of a loved one. While deciding how much and what kind of coverage you need will depend on your financial position and obligations, here are a few tips that will ensure that you don’t get taken for a ride:

• Ensure that your insurer provides you with an illustration for the policy that you have chosen. If they don’t, look for another insurance company.
• Get yourself a level-premium policy. Before you buy your life insurance policy (term or permanent) you must ensure that your illustration guarantees that your premium payment will not increase over the duration of your coverage.
• It is important for you to determine the duration of coverage is important. This will help you ensure that you get the right type of policy for you and also that you keep the premium payments affordable. One way to do this is shop around and get rates from multiple insurance companies.
• Most important: Ensure that your insurance carrier has the financial stability to pay your claim in the event of your death. Know the financial soundness of your insurer.

If you enjoyed this article, please bookmark it at del.icio.us »

This entry was posted on Saturday, September 30th, 2006 at 10:07 pm and is filed under Risk Factors. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.