Why do I need life insurance?
Think of insurance as income protection. If the insured passes away,
the beneficiary receives the proceeds to offset the lost income. If
you are married and your spouse is not working, you probably need
insurance. The primary purpose of life insurance is to replace the
insured person's lost income in case of death.
you are independently wealthy, you may think that you don't
need life insurance because you already have all of the money that
you need. That may be true for some but estate and tax settlement
considerations could disturb any bequests and/or obligations to
your surviving family.
Do I need a
will? What if my spouse has one?
of both spouses having a will can not be overstated. The main benefit
if having a will is that it allows the individual to have control
over their estate. Thus, you decide where your money goes. If you
die intestate (without a will), a court appointed administrator
decides how your estate is distributed. Also, keep in mind that
the surviving spouse may not be able to take full advantage of allowable
deductions if a person dies intestate.
to death, a will may be changed or revoked at any time. A marriage
automatically invalidates a current will so it pays to review your
If I die early,
who is responsible for managing the money I leave behind?
executor of your will is responsible for managing your affairs after
much life insurance should I buy?
good way to begin to understand life insurance is to think of it
as "emergency money". Should the person who is insured
pass away, the insurance provides for the family left behind by
replacing the income of the insured.
actual amount of insurance that you should have at any given time
will vary over the span of your life, as your overall financial
a general rule, when calculating how much life insurance you should
have, it should be roughly between five and ten times your annual
income depending on the circumstances of your particular life situation.
example, a young couple with one wage earner and several children
would need enough life insurance to cover several years of living
What is the minimum
amount of insurance needed?
When deciding on the minimum amount of insurance needed, you should
always consider whether anyone would suffer financially if you died.
following four main factors should also be taken into consideration
when determining the minimum amount of insurance needed for your
particular life circumstance:
Monthly Expenses:- Calculate the amount that is spent on expenses
such as groceries, utilities and transportation. Also consider the
cost of health, car, house and personal insurance and expenses for
children including pocket money and clothes. This should basically
encompass all of the things that your income presently provides
Debts:- Look at the amount of money outstanding on your mortgage,
car loan, credit cards and personal income taxes. Debts include
all of the normal things you pay from the income you earn.
Future Expenses:- Do you have plans to send you children or
grandchildren to college? What about the trips and holidays you
would still have them go on, even if its without you? Some of the
other items that can crop up include things like the replacement
of a roof, the cost of health care needs for your spouse or your
parents, and your future retirement goals. Without your income to
pay the way, are they obtainable?
calculating the money required for the above expenses, you should
have a better idea of how much insurance you need.
developed this handy worksheet to help you to see How
much is enough?
What is the difference
between life insurance and annuities?
insurance protects an individual if they die too early whereas annuities
protect an individual if they live too long.
An annuity is
a contract between an insurance company and an individual in which
the insurance company agrees to pay a certain amount of money every
month for the rest of a person's life, beginning on a certain date.
A Fixed Annuity is one in which the insurance company takes the
investors money, invests that money, and then agrees to pay the
investor a specified and predetermined monthly amount of money beginning
on a certain date.
A will is a declaration of what people want done with their property
after they die.
is the difference between Term and Permanent insurance?
Term insurance is a type of coverage that is purchased in "renewable
periods". For example, with a 10 year renewable term the payments
would remain the same within that period. If the term life insurance
was renewed, it would change to a new rate and remain level for
a further 10 years. Term policies generally expire with no cash
value or death benefit payable, at age 75
Permanent insurance provides for coverage for your entire life.
This type of insurance coverage is more expensive, because the payments
will remain the same and you do not have to renew. The age constraints
are the same as term, and coverage will remain in force as long
as payments are made.
What type of life
insurance should I buy?
many cases, dependent on circumstances, the amount of coverage purchased
can be more important than the type of life insurance bought. Not
having the proper amount can result in financial hardship for your
simple terms, Term insurance is used for temporary needs (usually
20 years or less), while Permanent policies are meant for permanent
life insurance is cheaper if you need insurance for only a short
period of time, such as until your children are supporting themselves.
Be sure however that you have adequate life insurance to protect
your family's financial security.
benefits could provide policy owners up to 50% of their total coverage
amount if the insured is suffering from a terminal illness.
Who can I name as my beneficiary?
Most people choose their spouse or the person or persons who
are the most financially dependent on them. Depending on the reason
behind the insurance need, it could be any member of the family, a
friend, or a business partner or even a charitable organization.
What is needed to buy insurance?
To purchase insurance, you need to:
1) Determine the amount of coverage required.
Complete an application for life insurance.
a standard medical exam performed to determine any preexisting conditions.
Make the first payment. The coverage will begin after this has been
How much does it cost?
As you will see (View
sample payment tables), the monthly
cost of buying $250,000 of life insurance can be less than a lunch
time snack for two . Payments are based on your age, health and
Payments for smokers are higher than illustrated.
The sample figures from the above table
are indicative of the lowest premium available for the preferred
non-smoker. Fifty-five life insurance companies with over 400 plans
How can Fiscal Agents Insurance help?
Agents Insurance Ltd. is an independent life insurance agency. We
use LifeGuide®, a premier insurance rates software, to
help monitor the insurance industry and its rates. We can work with
you to determine the amount of coverage you need and set you up
with a policy that will meet the individual needs of your family.
Click to see more information on how Fiscal can help