Choosing a life insurance

Thinking about a life insurance policy is not easy. It forces you to face your own mortality and to contemplate the possibility that could forever leave your loved ones. However, difficult it may be, it is extremely important to talk about this with your partner, especially once they become parents. A life insurance means that if you die, your family will cover the costs of food, housing and health debts and pay major expenses (including higher education), and maintain the lifestyle to which they are accustomed.

• How much coverage do I need? 
• The general rule is six to ten times your annual income. However, the particular situation of each is different, so the amount of coverage you need depends on several factors: 
• How much your family spends on housing, food and clothing?
• Much money your family will need to cover specific large expenses, such as college education for your children 
• Much does your partner (in other words, how many of these costs will be covered by the income of your spouse)
• What is the value of investments and other assets you have (how much will cover the expenses of your family)

What is term insurance?

This simple insurance coverage functions as auto or home. If you die while the policy is in force, your family will get the amount for which you are insured. If you die before the expiry of the policy, the insurance company will not give you anything (even so, it is better than the first option!). Some insurance policies fixed term allow you to renew at the same rate for many years while others do not.

Those that are generally allow a bit more expensive. Insurance term life it is more convenient to most young middle-income families with children, because it covers a period, with affordable premiums. Insurance premium coverage of $ 250,000 could cost a nonsmoker 30 years about 150 or 200 dollars a year.

Rates are fixed for a period of time when the initial contracts, but then are increasing with your age. A more recent option, insurance term life with return of premium, you refunded your payments if you survive the term. The return of the premium is tax-free because you do not get more than what you paid. However, these policies can cost between 25 and 50 percent more than the common insurance policies of this type.

What is life insurance or permanent life?

This more complex alternative, also known as life insurance with cash value, provides an insurance policy and an investment account. Premiums for permanent insurance that are more expensive than term insurance, but a portion of those funds go to a savings account with tax deferred. Rates are fixed. You will pay the same premium at 60 than at age 30 (or the age at which you acquire).

If you die, your spouse or your family charged the death benefit. However, you can also choose to remove the money from the policy when you are older or you retire and get savings with payment-deferred tax. Other insurance policies for life (insurance susceptible life interest, universal life insurance, variable life insurance) offer more flexibility, such as adjusting the premium or death benefit.

Do I need disability insurance?

If you are between 35 and 65 years old, you have more chance of becoming disabled and unable to work it died, so it makes sense to insure your earning potential. Standard recommendation purchase disability insurance that provides 60 percent of your income. Learn more about disability insurance.

What is mortgage life insurance?

This type of policy guarantees you that your entire mortgage is canceling in the event of death, your heirs freeing housing payment. However attractive it may seem, may not suit you. Insurance term life can serve the same purpose for a much lower price, and gives your heirs the option of keeping the house canceling the mortgage or invest the amount paid by insurance.