If your employer does not provide life insurance benefits and you would like to choose an insurance plan for yourself, there are certain critical components to keep in mind. Most importantly, you need to determine how much life insurance you actually need to cover your family’s expenses after you’re gone.
We put together some helpful tips to help you make a knowledgeable decision.
- If one spouse is employed and providing the family’s living expenses, then it’s a good idea to insure that spouse.
- A survivorship policy (second-to-die) may be the more appropriate, if, the life insurance proceeds are needed to pay for federal estate taxes, normally due at the death of the second spouse.
- To hold life insurance policies that can ultimately benefit the children and other beneficiaries, you should create a flexible document as an irrevocable insurance trust.
- If your estate will have a need for cash at your passing and there is no source of cash, a life insurance policy can provide the alternative source to meet this estate tax need. Take into consideration college tuition, mortgages, and car payments.
- Consider contacting an insurance professional or financial planner to help you determine how much money your family will need. Most insurance professionals will provide a Financial/Capital Needs Analysis free of cost.
- An experienced agent will ask for financial information to be sure they are helping you apply for the appropriate amount of insurance.
- To buy life insurance, you usually need to undergo simple medical examinations to help determine your insurability and the costs of your policy. This could include a urine sample, blood draw, or EKG, to name a few.
- Review life insurance needs/plan every 6-12 months with your agent.
- Changing policies may affect your income taxes, especially if not done properly.
- Be candid when working with a professional and find one you trust.