Selecting Your Life Insurance

Buying a life insurance policy means different things to different persons. When it’s time for you to buy life insurance, the first thing you need to do is to set your goals. Why do you need life insurance coverage’ Do you just want to make it easier for your executor to bury you’ Do you want to leave your family an income’ Many people use whole life policies as a tool for planning for big expenses, such as college, retirement, or just retiring debt in case of death or disability. Think about what you need your coverage to accomplish before you decide which kind of policy is right for you.

Second, before you buy a policy, take a careful look at your budget. Be sure you can afford the policy you buy. Know how much you can spend each month on premiums. Term policies tend to be less expensive than whole life policies. Some people buy whole life as an investment tool, but others opt for a combination of term life and whole life to meet their unique financial needs. Whichever kind of policy or policies you decide are best, always be sure you can make the payments. A qualified life insurance agent can help you find options to schedule payments in ways that work for your budget.

Third, don’t forget that your life insurance needs to protect your real earning power, and that is more than just your salary. If your family would have to buy its own health insurance after your death, for example, or even if you think it’s likely your employer would drop their coverage in the future, be sure to include this cost in your life insurance figure. You probably also want to calculate 3 per cent inflation (at least) into the figure that will provide for your family’s needs. Be realistic so that you select the amount of coverage that really meets your family’s needs.

Finally, consider what stage you are in life. It may be that all you need is a death benefit. But if you have people dependent on you for their income, you may need to leave them a great deal more. If you have dependents, make sure your income is replaced in the event of your death or incapacity. And if you need more money for your retirement than your social security checks and pension will provide, consider whole life as an investment tool.

Look long and hard at your goals, your budget, and the needs of those you love. Consider where you are in your life and what you want to do with the years ahead. When you have clear goals you can share with your agent, then he or she can help you find the exact coverage that is best for you.

Tom Martens is the content syndication coordinator at Lifeinsurance-Southafrica.co.za South Arica?s leading Life Insurance and Life Cover portal.