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Right Protection = Right Product + Right Amount
There is no doubt that everyone needs life insurance, but the real question is how much and what kind of insurance policy?
First, let’s talk about how much life insurance coverage you need
In order to calculate you total insurance needs add up all your debts, mortgage, and financial obligations to others. Determine how much money your family will need to meet their ongoing needs if you are not around to help. These needs include your income replacement and kids educational expenses. Once you have all the numbers available, add them up to get your life coverage amount. It is very important to get the right coverage amount because if you are underinsured, it will put your family on financial risk in case of uncertainty on other hand buying too much coverage will become a burden on your budget.
Once you have determined how much life insurance you need, next step is choosing the right product
When it comes to choosing right type insurance policy, for most people there is one word answer, “term”. Term insurance is the cheapest and you can buy as much as you want to cover your needs. Buying term insurance makes sense because your obligations have a time period, such as 25 years amortization on mortgage. Therefore, buy 25 year term life insurance policy.
Other type of life insurance is permanent life insurance, such as whole life and universal life. It’s expensive and you pay premiums for whole life. Permanent insurance comes into play when you need estate planning and concern about tax consequences at death. In fact, most of us are living on tight budget and it does not make sense paying too much for life insurance when you have hard a time saving for present and future needs.
Analyze you current financial situation and figure out your insurance needs. Buy the right insurance product according to your current needs and future goals.
Harnek Singh Uppal (416) 723-3226
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