How to Evaluate Life Insurance
When evaluating Life insurance, it is important to assess your financial standing when you will not be around to feed your family. The assessment must be correct and fair as preserving the future of your heirs will be the most important thing for you.
Instructions
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1
Do you need life insurance? This is the question you need to ask yourself before determining whether you require one. All will depend on your financial health. First analyze all your expenses, including debts, mortgages, personal loans, student loan etc and then take into account your sources of income. If you are the only person earning in the family, then you may require a life insurance so that the contribution continues even if you get ill or retire. Assess the savings you have at your disposal, along with your personal assets.
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2
Evaluate your options. Shop around and identify the pros and cons of each policy on offer. Decide how you will be able to pay the premiums and compare the relative benefits you will gain. Your decision must take into account the future. What will happen after your death? Is the policy protecting your spouse after you have passed away?
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3
Compare the policies. With the insurance business getting competitive with each passing day, you need to pursue the right service. Some may have lower premiums, but the overall benefits will be lesser than other insurance policies. You will also need to take into account special circumstances, such as workplace accidents and deaths due to criminal offences etc. Consider the time frame for each policy and what the legal implications a policy will have in case of an emergency.
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4
Riders attached to Life Insurance Policies. It provides additional benefits and protection in case of accidental death. In certain cases, the face amount is doubled if death results due to an accident. Moreover, in case of disability, the premium may also be waived off. Rider is therefore an essential part of insurance policy but is separate from the main policy.
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5
Evaluate circumstances without life insurance. This is for those who have a stable source of income and have no dependants. Check whether your savings are enough to meet for funeral and medical expenses. In such scenarios, pursuing life insurance may be unnecessary.
