The Factors to Consider When Choosing the Amount of Coverage

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If you are a senior citizen, it is advisable to consider purchasing life insurance for seniors. However, to choose the right policy, you need to determine the amount of insurance coverage you need by comparing the current income of your loved ones and their estimated income needs when you are no longer around. Furthermore, you need to consider other assets (such as retirement savings, group life insurance and savings or other investments) that may be invested to generate income. Consider also any capital or income gains taxes that have the capacity of reducing the amount of income to be received by your family. Therefore, if you are a senior and you need a policy, you need to determine the following:

  • The amount of income that you provide

To determine the amount of insurance that you and your family need, you need to ascertain the amount of income that you generate. If you are the sole breadwinner, you need to make sure your dependents are well provided for when you are no longer present- the coverage should ensure the lifestyle of the family is not undermined. When choosing coverage, you can consider 6 to 10 times of your annual income. If your spouse is a secondary breadwinner, the amount of coverage can be reduced significantly. Therefore, by getting in touch with your adviser, he/she will be in a position to recommend an appropriate coverage.

  • The lifestyle of your survivors

You need to ask yourself "How will my survivors get by when I am no longer present?" You want to make sure the lifestyle of your loved ones is maintained. You do not want to get your spouse and/or children to struggle financially while trying to make ends meet. The daily upkeep of the family should be properly taken care of. Furthermore, the children and/or grandchildren's college should be catered for. You want to make sure they receive the right quality of education by setting aside money that can be used to help them complete their education- when you are no more.

  • The number of people who are dependent on you

To choose the right policy, it is important to determine the number of people who are dependent on you, including a spouse, children, grandchildren, parents, brothers and/or sisters. If you have more dependents, you may consider their needs to determine the right coverage - the fewer the dependents, the lower the coverage that you need.

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