The insurance industry is becoming increasingly more automated, with some insurance providers encouraging consumers to use a website to find their ‘best rate’ and life insurance products. The convenience of browsing online rates comes at a cost however; insurers are going to recommend the products that a search engine selects based on data, but not on a personal interview and all the parameters that need to be considered.
Rates for life insurance policies, are impacted by several factors, including age, the health of the applicant, lifestyle habits (smoking, drinking), high-risk occupations and more. So when it comes to finding the right life insurance policy, having a qualified licensed agent work one-on-one with you, offers a great advantage. Your life insurance agent will research every possible insurer and policy style, to find one that suits your needs, and offers you the best value for your premium. Our agents will present a number of options, and review the terms and conditions thoroughly, so that your family understands what is being provided for, through a comprehensive and personalized insurance product.
One of the biggest determinants of the cost of your life insurance policy, is of course the amount of premium you choose. If you have multiple policies in force, you may be seeking gap insurance, or a small final expense policy, that provides for funerary expenses and coverage. The simple equation for calculating how much life insurance you should have, according to financial planning experts, is based on the DIME estimate, which includes:
- Debt versus asset ratio (evaluation of liquid assets, secured assets and serviceable debt amounts)
- Income support estimation. How many years would your family require financial support after the death of one or more income provider?
- Mortgage payments and total amount outstanding on the principal residence.
- Education, which factors the number of children and their need for financial support for college or technical school training.
The old rule for determining the right amount of life insurance benefit, was 10x the individuals annual net income. However, financial experts today say that the rule is now outdated, given the rising costs of inflation, including living expenses and health care needs. Using the DIME method, consumers should deduct existing savings and other liquid assets from the total net amount required to live comfortably, and remain in the family home.
A qualified life insurance agent will help your family walk through all the factors that determine the ideal amount of premium, to provide for your family. Contact us for more information, and a referral to one of our trusted agents, to start a conversation about insurance products that offer a tax sheltered vehicle, to provide for the financial well being of your dependents. New life insurance options for lower benefits, can accommodate individuals with preexisting conditions and chronic illness, with affordable rate options.