Know these Five (5) Tips to Save on your Life Insurance Premium | EfPrime Finance
Know these Five (5) Tips to Save on your Life Insurance Premium | EfPrime Finance
When you’re considering life insurance, there are a lot of different factors to consider. There is no one-size-fits all approach when it comes to this type of coverage, so in some cases you may need more than one type of policy. The key is to assess your particular situation and then take appropriate action.
This
article will go through 5 important tips on what you need to know about life
insurance and how it can protect your family’s future.
1. Understand How Much Coverage You Will Need
One of
the first things you will need to do is to figure out how much coverage you
will need for your situation. One way that can help you do this, is to consider
how much it would cost for your family to be able to continue their same
lifestyle if you were no longer around and they had no income. For example,
this includes looking at things like mortgage or rent payments, what bills would
need to be paid (such as utilities, car loans and insurance), as well as
considering whether or not they would still be able to depend on your income
(in the form of retirement or other savings). You can calculate the cost if you
want to by using the following formula: Annual income (x) 10 years, the product
is the ideal value of your life insurance coverage. This means that in case of
your unfortunate death, your respective family can live without changing their
lifestyles for the next 10 years.
2. Be Cautious With Term Life Insurance
Many people think that term life insurance is the best way to go, especially for those who do not want to pay a lot to get life insurance since it is a cheap insurance. However, this is not the case. Not only that, but it also comes with a host of different restrictions and limitations that you might not be aware of. Term insurance as compared to VUL life insurance, the former is prone to policy lapsation due to non-payment because the insured is not motivated to pay off his/her premium since paying a term insurance is actually an outright expense of the family.
Another
negative aspect of term life insurance is that the longer you are in your
policy, the more likely you are to become uninsurable due to changes in health
and age. Some companies will even cancel your coverage after only 3 years if
you become uninsurable. These are not major issues when you have a term policy,
but it can be a real problem.
3. Learn to Save for Your Future
Again,
this is something that many people ignore simply because they do not want to
have to work for the rest of their lives, and think that things will just fall
into place if they are given the opportunity to collect an inheritance. It is
important to save your future and teach yourself how to live on less if you
want the freedom of being retired with a secure future. There are many ways
that you can do this without having to sacrifice too much in your current
lifestyle.
4. Make
a List of Things You Want to Do in Life
Looking
for something to do in retirement is extremely important. If you have never
thought about what it is that you want to do, then chances are you will end up
doing nothing and will become restless and bored.
5. What Do You Need? What Do You Want?
There
is a difference between the two, but both are important to think about when it
comes the time to choose your final resting place. Do you know how much income
you need for the rest of your life and make sure it is in the right account so
that if someone inherits money from you they can access it easily without much
paperwork.
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Disclaimer
The Author is advising readers to consult with your respective Financial Advisors before venturing in any investments. Investing your money is dependent to your goals and your risk tolerance. You should know the risks and rewards of investing before you actually do the same. The illustrations above are for educational purposes only and any risks or losses that you may incur are imputable to your respective decisions.
The author does not in any way provide a guaranty as to the effectiveness and quality of the products and services that are featured in this blog. The products and services were advertised based on personal experience and product and service reviews that the product/service received.
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