Is your life insurance enough? 3 questions to test it
PNB MetLife 18-01-2016 03:31:30 PM
Finding the right types of insurance can be a complex process. As many variables are changing constantly, one can easily lose the overview. When evaluating life insurance plans, there are some questions you should consider. Unsteady life insurance plans can bear uncertainties of the future, especially with regards to the financial security of your loved ones. But just how much is enough? Here are 3 questions that will help you to figure it out:
- Does your life insurance policy give you the right benefits?
For a start, think of your life insurance policy as a plan that takes care of your family should you be unable to do so. The best life insurance policy often a comprehensive plan that covers every small detail, leaving no uncertainty. However, this can also mean that you may be spending too much on your yearly payments. A policy with an exceptionally high premium should set the alarm bells ringing. Weighing the costs against the benefits is a great way of analysing the best fit for your life insurance needs.
- Does it cover your future goals?
One of the most commonly used approaches to calculate the right types of insurance coverage is to take your current annual income and multiply by ten. This ensures that for a period of ten years your dependents are taken care of. The variables used in this method may vary. Some individuals prefer to align their contribution with the increase in their income over the coverage period, while others tend to make adjustments in the time period when determining the coverage. Ultimately, the best life insurance policy should be able to account for the expenses that go towards achieving at least some of these goals, if not all of them.
- Does it cover your liabilities?
Your calculations should also take your dependents’ needs, wants and behaviours into consideration. Their lifestyle, education plans and expenditures will help you determine the amount of coverage needed to secure their future. In addition, make sure you account for outstanding liabilities such as home loans, car loans and credit card debts. Although the figure you get might be substantially higher, it will help you create a clearer picture of your requirements.
Although it takes time and effort to make the best decision, choosing the best life insurance coverage with the right policy provider can be easier with these steps. After all, knowing that your loved ones are protected will grant you peace of mind.