The Life Insurance Process In 4 Easy Steps
Congratulations: Just by reading this, you’re taking the first step towards purchasing life insurance. Although most people agree that they need life insurance, less than half do anything about it.
Step 1 – Decide Which Type of Life Insurance You Need
Ask yourself this question: why do I need to get life insurance? The answer to the question will help you determine which type of life insurance you need (temporary or permanent life insurance). When I ask myself this question, I think of the client who was killed in an automobile accident and how the life insurance saved the family financially. During their time of grievance, the mortgage was paid off and there was sufficient money to provide for the children’s future.
Step 2 – Decide How Much Coverage You Need
Deciding how much insurance you need requires a life insurance calculator. It is free, quick, and simple to complete. You should complete one for both spouses if applicable. Enter how much you will need for final expenses, paying off your mortgage, and other debts and cash emergencies. Planning for the education of your children is important – $25,000+ per child is typical.
Next, figure out how much money you currently spend. From this, deduct what the surviving spouse will earn. This is the amount to enter for ‘family income needed.’ Then enter the number of years you want this family income to last, and choose an interest rate and inflation level. Usually, you should have an interest rate two points above the inflation rate you choose. To be conservative, choose 4% and 2%.
The value of assets and RRSP’s is usually left blank unless you have significant assets that would be used to maintain the family’s lifestyle.
Step 3 – Get a Life Insurance Quote Online
Now is the time to get your life insurance quote online. Since 2000, IDC has sold over $2 billion worth of life insurance and over 6,000 policies without one complaint to the better business bureau. We welcome conversation to confirm what would be best value for you.
Step 4 – Purchase Your Insurance
The time has come to purchase your life insurance, preferably while you are still young and healthy. Complete the application over the phone and be sure to answer all the questions fully and honestly. If you are not sure about how to answer a question, ask your advisor. Remember, if you fail to disclose information that would lead to a different underwriting decision, you can put your payout at risk. For example, don’t claim to be a non-smoker if you actually smoke.