Tips For Choosing the best Term Life Insurance for your Family
Updated: Sep 7, 2021
Tip 1:What Stage of life are you in?
What What Stage of life you are in should be the first step in figuring out how much life insurance you need on each parent and choosing to go with a 10 year term, 20 year term or a 30 year term life insurance policy! Also the amount of life insurance you need based on everyone involved!
What Stage of life are you in & how many Family Members need to be protected to Determining Coverage Amount?
The financial responsibilities of a single parent are very different then the needs of of a couple raising children! The needs of a divorced parent who has the the primary custody of the children, rely greatly on the other parent to survive. In the same respect, The parent who who has less custody is usually The bread winner of the family. Statistically it is more common the father Has weekend and the mother Has the kids 5 days a week. Many fathers want to play a larger roll and have 50/50 custody! How will the bread winner survive in his role as a provider at his job or in his or her business? Without the help of the other parent it is very difficult to survive financially? How will the parent who provide the majority of the child care survive with out the help of the other parent. Equally the parent has to work full time while raising their kids. . Determining the amount of life insurance should be looked at differently. Also keep in mind the future and plan for it! Besides having life insurance in place to provide for your family incase of a untimely death, major accident or a unforeseen illness like cancer, a heart attack, or even Covid-19, We should consider the stage of life of our loved ones after we retire! Forbes Magazine online article says:
"Having life insurance after retiring is vital if your savings will not comfortably cover someone who is financially dependent upon you after you pass. This person can be a spouse, partner, special needs child, sibling, or other family members who will require more than your savings so they may live the life you want for them."
The younger you are the better off you are! Take the opportunity to get the most coverage your carrier will give you. The insurance carrier will limit you to the need, or the need of the insurable interest! So if your a single, make sure the beneficiary has the insurable interest if you were to die! Things like the cost of maintain your home or the cost of your funeral are things they might consider. So using salary or dependents are other things that may be considered. Choose the longest term policy offered. I always suggest using multiple carriers! This way you will have the most coverage stacked between multiple carriers. The carrier will consider how much income the stay at home carrier is bringing in.
To me this is not a valid way of calculating a persons worth. A good agent will argue the case with the Insurance Carrier for the benefit of the insured and the beneficiary. In the car of one of my Favorite Clients, She was a single mother whos Ex-husband was remarried, and not living up to the obligations of being a parent. He contributed no many to the children or to the mother of his children. I this case She had a degree in education that she never perused. She also had a degree as a cosmologist that she did perused for only a few years. At the time she found out her mother had early onset Alzheimer and dementia. The father was also my client with a final expense burial insurance policy! He had bought a final expense burial insurance policy from me a few years earlier. We were able to also insure the mother with a guaranteed issue whole life Insurance policy with a 2 year waiting period. The only insurance we good get for for someone in her condition! They asked the daughter to stop working to take care of the mother due to the high expense of a full time nurse! She aggreged and moved in with them with her 2 children. Due to the fact she hasn't worked in many years and was the caregiver for the mother and two children the insurance carrier only wanted to issue a 10 year term life insurance policy with a face value of $150,000 as a death benefit. We fought this decision based on the fact that she could work in the future and make about $65,000 a year if she was working two jobs utilizing her degrees and certifications.. With the normal basic calculation for determining the need of a client being 10 years of yearly income minus assets We also brought to the attention of the carrier that if something happened to her as a single parent that the father would have to care for two school aged children and a wife with Alzheimer (Yes We can help with life insurance for seniors with Dementia)! Here are some resources from alzheimers.gov website https://www.alzheimers.gov/life-with-dementia/planning-for-future
By making him the owner of the policy the insurable interest was increased! She ended up with a 30 year term life insurance policy for $650,000 from Protective Life Insurance Company. Due to the fact she was 37 and good health, the policy had a monthly premium of $67 a month locked in for 30 Years! This will make sure that the kids will be able to attend college, stay in the activities they love and have a legacy from the their mother! The father and mother would also be protected against the loss of the main caregiver in the family!
Understanding the stage of life and the insurable interests of all involved is the most important part of choosing a life insurance policy!