I wrote this up after Phil's question about insurance it's just a few tips but I think there's good info here for anybody needing life insurance.
Now then, are you sure you need Life insurance? I hate seeing single people with no dependants strugglin to make payments for insurance they don't even need. If there's no one who would suffer financialy from your loss, why are you paying for insurance? Get yourself disability and critical illness policies instead.
Couple of things you should know when your filling out your paperwork.
1 Be honest, people are tempted to lie or fudge a little on their health background, don't! They can and will deny your claim if they discover it.
2 They may ask if you engage in high risk activities
such as scuba diving, skydiving, becoming a private pilot, etc.... if you haven't yet but are thinking about it don't say yes unless you have specific plans to do so. I had a client say he was thinking about taking up scuba diving and they more than doubled his premium!
3 Understand the formula to how they calculate the amount of coverage you need. You should work with the insurance agent to analyze what you need covered. Don't just listen to him say "oh you need about $600k".
The formula should go something like this:
Immediate needs; funeral, health expenses, taxes.
Canceling of debts; Mortgage, Credit Cards, Lines of Credit, Car loans, etc......
Future funding needed; most of my clients wanted to throw in some cash for university for their kids.
Income replacement; to help ease the shortfall of the loss of income, generally 60-80% of the previous joint income. Keep in mind if one of the partners is a stay at home parent, you potentially now have daycare, house cleaning, etc.... expenses to account for. Don't forget to include future savings and investments. Also, replacement income for the surviving spouse to take time off work for a few months (or a year).
Then take of the assets you already have and can use and minus of the scary total (it will be scary).
Lastly; If you need a physical; don't exercise the day of the test as that alters your body chemistry and they might think there's something wrong. Next if you have a headache or just take Aspirin daily, don't take it before the test. It elevates your liver function and they might think you're an alchoholic.
Now then, are you sure you need Life insurance? I hate seeing single people with no dependants strugglin to make payments for insurance they don't even need. If there's no one who would suffer financialy from your loss, why are you paying for insurance? Get yourself disability and critical illness policies instead.
Couple of things you should know when your filling out your paperwork.
1 Be honest, people are tempted to lie or fudge a little on their health background, don't! They can and will deny your claim if they discover it.
2 They may ask if you engage in high risk activities
such as scuba diving, skydiving, becoming a private pilot, etc.... if you haven't yet but are thinking about it don't say yes unless you have specific plans to do so. I had a client say he was thinking about taking up scuba diving and they more than doubled his premium!
3 Understand the formula to how they calculate the amount of coverage you need. You should work with the insurance agent to analyze what you need covered. Don't just listen to him say "oh you need about $600k".
The formula should go something like this:
Immediate needs; funeral, health expenses, taxes.
Canceling of debts; Mortgage, Credit Cards, Lines of Credit, Car loans, etc......
Future funding needed; most of my clients wanted to throw in some cash for university for their kids.
Income replacement; to help ease the shortfall of the loss of income, generally 60-80% of the previous joint income. Keep in mind if one of the partners is a stay at home parent, you potentially now have daycare, house cleaning, etc.... expenses to account for. Don't forget to include future savings and investments. Also, replacement income for the surviving spouse to take time off work for a few months (or a year).
Then take of the assets you already have and can use and minus of the scary total (it will be scary).
Lastly; If you need a physical; don't exercise the day of the test as that alters your body chemistry and they might think there's something wrong. Next if you have a headache or just take Aspirin daily, don't take it before the test. It elevates your liver function and they might think you're an alchoholic.
