Cash Value Of A Life Insurance Policy
Before we consider how much life insurance can cost, I feel it’s
important to make sure that we know what life insurance really is. A lot of
people seem to confuse about life insurance with a retirement plan. A retirement
plan is something which gives you monthly or annual monetary rewards after you
retire. A life insurance plan however is a reward to your family and your loved
ones which they only get after you pass away. Some might even consider this to
be the ultimate gesture of love!
Now that we have established what life insurance really is, you
probably realize that this is something you need especially if you have people
who are dependent upon you for financial support. If you already have a life
insurance policy then it’s important to question whether it is sufficient. You
don’t want to pay too much for life insurance and you also don’t want to pay to
little! To help you make this decision we will look at some of the key factors
which impact the amount of life insurance you need to have.
Why do you need life insurance?
The question stated above is vital in determining the amount of
money you want to be paying for your life insurance. It’s important to
determine the purpose of your life support and why you want to have it so you
know precisely how much of it is required! For example you might have young
children and you want to make sure they have enough money for college. You
might have a big family house and you want your family to keep living happily
in the house even after your demise and therefore you would want them to have
the money to keep the place. Conversely, if you are a single and not married
and have no dependents or if you are single with grown children who are
financially stable then you might not need as much life insurance. These are
just some of the questions that you need to ask yourself.
How much money do I need?
Now that we know what you want life insurance to cover, we have to
considered each reason individually. For example, if you want your family to
keep living in the house, then you might want to take a look at the house
electricity bills, water bills, and gas bills. This would give you an idea of
the monthly costs that your life insurance would have to cover for a while
after your demise. If you want to make sure your children can attend college
after you pass away, then have a look at some of their tuition fees and living
costs and also add that on to your life insurance costs. It’s important to deal
with these issues before hand while we have time. Also you want to make sure
you do ample research because the life insurance you pay is your money. So you
want to make sure that you don’t end up paying more than the amount required or
worse, less than the amount required.
Final words
None of us can look into the future (at least not yet anyways) and
there’s no knowing what the future has in store for us. Therefore its better be
safe than sorry. If you were dying your family would be emotionally devastated
but the last thing you want to do for them is ensure that they don’t have to
put up with a financial crisis at this time. Once you have a rough estimate of
how many costs you will need your life insurance to cover, you can then choose
or draft an appropriate plan which will help ensure you have the appropriate
amount.
