5 Tips That Can Help You Find High-Quality Life Insurance Coverage

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Many Round Rock-area insurance underwriters offer high-quality life insurance policies that are designed to help you protect your family from the financial risks that occur when a loved one dies unexpectedly.

Here are five tips that can help you choose one of these life insurance policies which suit your needs.

Ask About Death Benefit Options

Most life insurance policies offer death benefit options that can help you defray unexpected funeral costs, unexpected medical expenses and other unexpected costs economically.

Asking insurance agents about these death benefit options is worthwhile because it can help you choose life insurance policies that offer enough coverage to pay for the most important expenses that occur when a loved one dies unexpectedly.

Ask About Your Policy Conversion Options

Many life insurance policies offer provisions that allow policyholders to convert their policies to annuities or other life insurance policies without incurring a penalty.

Asking about these policy conversion options is recommended because it can help you find life insurance policies that offer your family the best long-term value.

Ask About Your Cash Surrender Options

Many life insurance policies also offer provisions that allow policyholders to surrender their life insurance policies in exchange for a lump sum of money.

Asking about these cash surrender options can be useful because it can help you choose life insurance policies that offer the flexibility needed to suit your family’s short-term and long-term needs.

Compare Your Beneficiary Options

Most Round Rock-area insurance underwriters and agents offer several life insurance policies that offer beneficiary options which are easy to customize to meet your needs.

Comparing these beneficiary options is a good idea because it can help you avoid many of the mistakes that can make using life insurance difficult for many policyholders.

Ask About Your Premium Options

Contrary to popular belief, most life insurance policies feature premiums that can be customized to meet your needs. As a result, it is a good idea to ask your insurance underwriter for details about your life insurance premium options.

This is the case because it can help you simplify the process of finding life insurance premiums that fit your budget.

The Texas Department of Insurance offers many useful life insurance checklists that can help you organize your search for life insurance that suits your needs.

Feel free to combine these checklists and tips to help you search for Round Rock-area life insurance policies that suit your needs.

Why You Need Life Insurance Before Investing

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When people begin to invest money, they’re usually hungry for early results. They may approach investing with the conviction of a recent convert, saving and investing as much money as they can, even to the point of neglecting other needs, such as putting life insurance before investing. This is understandable, and quite natural, particularly if you are either young or relatively new to investing.

In spite of your enthusiasm, it is important to make sure that you have a few basics covered before you begin investing. One of those basics is life insurance.

You’re Not Ready To Invest Unless You’ve Covered The Contingencies

Investment advisers and financial planners commonly recommend that before you begin investing you should have a well-stocked emergency fund. That can include anywhere from 3 to 6 months of living expenses. The purpose of the fund is to make sure that you are protected from any income disruptions or large expenses that might force you to tap your investment portfolio ahead of schedule.

The fund enables you to carry on with the business of life, while keeping your investment portfolio protected from early withdrawals.

In essence, what an emergency fund does is cover a contingency – a temporary loss of income, or the unexpected arrival of a big expense or two. A life insurance policy functions similarly as a contingency plan. It creates a basic survival plan for your family or any other dependents that you have in the event of your death. This is a fundamental need, which means you should have adequate life insurance before investing.

Life Insurance Before Investing

Future Wealth Won’t Take Care Of Your Family If You Die Before You Get Rich

There is sometimes a thought that you don’t need life insurance, since your investment portfolio will eventually grow to the point where you will be effectively self-insured. This notion is especially popular among the young, since the prospect of their own death seems so remote.

The problem with this thinking is that it may be many years before you reach the point of being anything close to being self-insured through your investment portfolio. Let’s say that right now you have $10,000 to invest, but you fully expect it to grow to over $100,000 within the next 10 years. Maybe at that point you will be something close to self-insured, but what happens if something happens to you between now and then? What happens if you die when you only have $20,000 in investments?

Future wealth will not protect your family if something were to happen to you today. That’s the whole purpose of life insurance – as a contingency to take care of your family’s financial needs before you have the money that a large portfolio will provide.

The Cost-Benefit Of Life Insurance Is Much Higher Than An Equivalent Investment

One of the biggest advantages of life insurance is that you can quite literally buy six figures in coverage for just a few hundred dollars per year. This is especially true if you are in your 20s or early 30s. You may be able to buy $250,000 in life insurance for just a few hundred dollars per year.

If you are just starting out as an investor, it will take you many years – even decades – to accumulate that much money.

There may sometimes be the thought to keep your expenses as low as possible in order to maximize the amount of money that you have available to invest. If a large life insurance policy is only going to cost you $500 or $1,000 per year, it won’t be taking much away from your investment efforts.

And the benefit that you will have as a result of paying the relatively small premium will be enormous for your family.

Life Insurance Before Investing – Just In Case Your Investment Plans Don’t Quite Turn Out

It’s natural to be optimistic when it comes to investing. In fact, optimism is virtually essential to a new investor. But it is a sad fact that investment plans don’t always turn out the way we want them to, despite our best efforts.

Stock markets crash, individual investments blowup, and sometimes we need to tap investment portfolios early for unexpected reasons. The point is, investing is never a guarantee.

And just in case it doesn’t turn out as well as you hope, your life insurance policy can back you up with a plan to cover your family in the event of your death.

Life Insurance Should Be Seen As A Form Of Investment Diversification

You’re probably well acquainted with the idea of investment diversification. But not all diversification efforts are neatly contained within an individual portfolio. Some of the best forms of diversification you can have will be outside your portfolio. This can include an emergency fund, fixed income investments (like bank assets), and real estate.

But insurance can also be a form of diversification. As discussed above, it is a fail-safe against your death, at least until the time arrives that you have enough money saved and invested that you no longer need to maintain the policy.

If you can think of life insurance as a financial instrument that complements your investment portfolio, having it will seem more logical. And not having it can seem like an exercise in being penny wise, and pound foolish.

If you are an investor, especially a new one, do you have a credible life insurance policy – just in case? If not, then you need to make sure you pick up some life insurance before investing another cent!

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What To Look For When Choosing A Life Insurance Policy

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[The following is a guest post discussing things to look for when purchasing life insurance.]

If you have children or others who depend on your income for their survival, you should seriously consider a life insurance policy. This allows those close to you to have additional income in the case of your early death.

It is not only important to have a life insurance policy in place, but it is also necessary to have a sufficient amount of coverage. You should have enough insurance to cover at least five years of your current salary, if you are married. If you have children or many debts, you should have a large enough policy to provide up to ten years worth of your current salary.

When deciding what term to take for your insurance, take a look at what will need to be done with that money. For instance, if your children are newborns, a 25 year term policy will make sure that they are cared for if anything happens to you before they are able to financially take care of themselves.

Life Insurance Policy

If you’re married, you should purchase a policy that is two-in-one. This is a joint policy, versus two separate policies. The premium for a joint policy is often cheaper than the premium for two separate policies. You would not need to change anything about your coverage. You would still have the same benefits, but would be able to decrease the amount you pay.

Most life insurance policies are long term contracts. This means that once you sign the contract, you have a responsibility to make payments toward your policy. Therefore, when you are obtaining life insurance, make sure you have a firm understanding of your needs, what you are receiving and that you will be able to afford your payments. If there is anything you do not understand, do not contract yourself to the policy. Ask questions first.

Understand the types of life insurance available before making a decision on which to purchase. Most insurance policies focus on Term Life or Whole Life and knowing the difference is key. Bear in mind that with both of these types of policies, they can be tailored to your specific needs and situations. Be sure to conduct extensive research before making a decision.

When you are planning on purchasing a life insurance policy, select an independent broker. Independent brokers can generally offer more selection in terms of policy and cost than a broker who works exclusively for a specific insurance company. Company brokers are limited to the products their company sells, and may also be pushed by the company to recommend a particular product.

Insurance companies often have extra fees for customers who pay every month instead of just once a year. You may be able to save a significant amount of money on your life insurance by paying your premiums annually instead of monthly.

Prior to looking for life insurance on your own, check with your employer to see if there is available coverage through them. In many cases, employers can negotiate a rate for their employees and their family members. This can save you a lot of money and give you a great policy as well.

photo credit: Freedigitalphotos.net

Know What To Look For When Shopping For Life Insurance

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Life insurance can be a big purchase and a stressful decision. You will really have to weigh the different possibilities carefully before you commit to a particular insurance package.

It pays to spend a lot of time analyzing your needs and researching all of your options, because you may not get a second chance at selecting your policy; it is your family members that will deal with the consequences of your choices.

Funeral Costs

One thing to remember when considering whether or not to buy a life insurance policy is that you may not need one. If you have no costs to cover upon your death, or have the money for someone to use to pay for your funeral expenses, and you have no one who depends upon your income for support, it may be that you don’t even need a policy.

Keep in mind that just because you have no dependents it doesn’t mean that you don’t need some sort of coverage for when you die. If you do not have the money saved to cover your burial expenses, but you don’t see the need for a full life insurance policy, you can purchase funeral insurance instead.

Purchasing your funeral plot in advance of your death will help your family save money once you’re gone. Unfortunately, spur-of-the-moment plot purchases may bring out the unscrupulous nature of some in the funeral industry (as is the case with most price gouging), and a plot after death can cost a lot more than a plot purchased well in advance.

The cost of funerals can be very expensive, and your loved ones do not need the added stress of trying to figure out how to pay for your burial! So even if you don’t have people who are depending on your income for support, you should consider this option.

Life insurance can help ease the burden to your family by helping with funeral and burial expenses, and also pay your family an amount that you designate. For a relatively low monthly cost, your family can be covered $100,000, $250,000, $500,000, or another amount that is right for you.

You will have to know how much money your family will need in the event of your death. So consider the amount of your debt, burial costs, and how much you want to leave behind for your family. If you have a significant amount of money saved or a lot of assets, you should consider that in your calculations as well.

If you are young, you may be able to purchase a small life insurance policy to cover the costs of funeral and burial expenses for just a few dollars per month. In any event, you may be able to provide your family with peace of mind at a low cost, so it pays to go out and get a few quotes.

When considering life insurance, think about how your needs will change over time. For example, if you do not have children your life insurance needs will be quite different ten years and five children from now.

Keep in mind that life insurance only pays out in tragic situations. Take the time to make a wise decision before jumping on the first policy that you see (especially if there is a washed up actor trying to sell it to you).

photo credit: Robert Kimberly

Tips For Choosing The Best Life Insurance Policy

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{The following is a guest post about finding the best life insurance policy…}

Many people find purchasing a life insurance policy stressful, but as long as you do your research you will be comfortable with the decision you make. As you know, the absence of a life insurance policy can be even more stressful due to the fact that no one can predict when they will need it.

Finding The Best Life Insurance Policy

When calculating how much life insurance you need, make sure to include both your life and death expenses. Unexpected hospital bills and funeral bills can be very expensive, so you want your policy to supply your household with enough, not only to go on living comfortably without you, but also to pay for any expenses relating to your death.

Best Life Insurance Policy

When selecting a life insurance policy, it’s best to avoid purchasing expensive riders unless you really understand and need them. Your advisor may tell you that you should add certain kinds of riders, but most of the time, you don’t need them. Typically, riders do not give you any benefits except under certain situations.

Watch out for universal life policies. The cash value of these insurances can decline over time, and what your family will be paid out will not reflect at all what you invested in this insurance. You should get a whole life policy, which guarantees your premiums and how much the insurance is going to pay out.

Focus on your health to further reduce life insurance costs. Taking actions such as quitting smoking or losing weight can have a positive impact on premiums for life insurance, as it reduces your total risk to the insurance company. Most life insurance policies require some sort of health examination, so taking steps to improve your health before the exam can significantly affect the total premium you end up paying.

Choose permanent life insurance if you want to build cash value. Building cash value in a life insurance policy helps you have extra money for the future. The insured can borrow the cash value at a low interest rate. They can also use it to pay the premiums. The cash grows tax-free, and many financial planners recommend it as a way to cover estate taxes as an element of a thorough financial plan.

An insurance plan is not a buy-it and forget-it purchase. You will need to revise your insurance plan as things change in your life and you get older. Changes in marital status, having children, or reaching retirement age are all reasons to review your plan and make adjustments.

While the process of selecting a life insurance policy may seem stressful, it is sure to be a relief once the process is completed.

photo credit: Freedigitalphotos.net