Term Life Insurance Explained E-Course Series Part 6 The Secret to Saving More And Protecting Your Family's Future. 7 Deadly Mistakes to Avoid When Buying Term Life Insurance Introduction Is your current amount of life insurance enough? How do you know? For most folks, talking about life insurance sounds almost as fun as a visit to the dentist. But, like that trip to the dentist, ignoring it can compound a relatively small issue and turn something that was merely uncomfortable into a complete nightmare. In the current economy where we are all looking to cut costs, it may be time to rethink exactly how much term life insurance coverage you really need. If you are considering canceling an existing policy, you might want to consider these 7 mistakes people make with their life insurance before you do. 1. "I'm all set for life insurance!"According to a recent Allstate Insurance survey of middle income Americans, most respondents felt that people should have some level of life insurance, but thought that it should only be enough to cover existing debt and funeral costs. Surprisingly, roughly 20% felt that term life insurance should replace the income of the deceased for the surviving family's sake. Click Here To Get a FREE No-Hassle Term Life Insurance Quote Now! According to a recent Insurance Information Institute poll, fully 1/3 of adults have no life insurance at all. Of the remaining people, most of them only have the insurance that comes from their employee benefits, usually 1x, or maybe 2x their annual salary. In all likelihood, that is not going to be enough income replacement to adequately support their dependents after their death. In fact, having a term life insurance policy that is equal to seven to ten times one's current salary is the minimum recommendation for someone with young children. This amount will ensure that the kids and surviving spouse are financially secure enough to make it through the time it takes to adjust to the loss of a spouse. 2. "Life insurance? I'd rather not talk about it." Let's face it nobody really wants to think about their own mortality. For most people, thinking about death is more than a little uncomfortable. Yet, most people do want to make sure their loved ones are financially secure after their passing. This weekend, find a few minutes to sit down with your spouse or significant other and ask the question, "How would you and the kids make it if I were to pass away?" It is important to address this question now. None of us are promised another day, and it makes sense to have a plan in place sooner rather than later. You will never get a second chance to buy life insurance after your gone! 3. "My dad told me to have coverage equal to 7 times my salary."In our parent's generation, the old advice of having 7 to 10 times ones salary was sound. In today's world, that is not as useful of a measure because of the diverse life circumstances found today. Many dynamics that were not so common 50 years ago can be found readily today. A single person with no dependents has much less of a need for insurance than the family with a stay at home spouse and 4 young children. Blended families also pose additionally complications when planning for life insurance. Instead of a ballpark guess as to how much your family needs, a more accurate approach is to sit down and make a list of the things that you want to protect. What would it cost to make sure your kids are raised in the manner you wish, or for them to attend the college you want them to attend? How will your spouse manage the mortgage, taxes, utilities, put food on the table, maintain the car, etc.? These are very small things that are often overlooked when making a financial plan, but came become very big challenges to overcome in the event of an untimely death of a working spouse. SAVE up to 70% on your policy! Get a FREE No-Hassle Quote Now! 4. "I never thought of that." An area that can be overlooked when making a financial plan is to consider the employer paid benefits that would be lost at the death of a working spouse. Costs such as health insurance, retirement account payments, child care credits, etc. all cease at the death of an employee. Consider that an employer sponsored health plan is subsidized by the employer. The question that needs to be asked then is, "If I die, that subsidy disappears. How will my family pay for healthcare after I'm gone?" Part of the answer of course is to make sure your life insurance will pay enough money to cover the new health insurance bill. 5. "I'm too busy to worry about life insurance now." It's easy to lose sight of the long term view when we are so consumed with managing our day to day lives. Don't lose track of how long it will take for your kids to be self supporting, and make sure the amount of term life insurance you have is equal to the task. A rule of thumb is to plan that your kids will be 'dependent' until age 25 due to college and finding a career. If your youngest is 10 today, you would want to have at least a 15 year policy to cover that risk period, 6. "It's too expensive." One of the first objections that many people have to buying term life insurance is that it will be too expensive for them. That is a huge mistake in thinking, as it is possible to find a policy that fits your needs and your budget. Term insurance is much more affordable than permanent insurance, and is the perfect tool for managing your financial risk. For example, a 40 year old male with a regular build, non-smoker, and taking medication for high blood pressure can obtain a $500,000, 20year term life insurance policy for $44.00 per month. 7. Bought it and forgot it. So you bought a term insurance policy 5 years ago? Are you the same person now that you were 5 years ago? If we are honest the answer is, "No." Maybe there have been some changes to your lifestyle such as getting married, having kids, buying a house, etc. These major "life events" are exactly why you should review your term life insurance policy from time to time to make sure that your policy covers your "new" situation. Determining the right amount of coverage that your family needs is one of the most important decisions you can make. Sit down with your family and begin a discussion. Once you've determined the right amount of coverage and have gotten a few quotes, you'll find that you will feel greatly at ease once you start a term life insurance application. After all, term life insurance is all about offering the insured peace of mind. Paying too much for Life Insurance ? Click Hereto SAVE up to 70% on your policy!
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