Understand Life Insurance to Generate Leads
Life insurance is not a mandatory coverage like other types of insurance in the United States, such as health or homeowners, for those who are still paying on their home. However, the purchase of life insurance is often considered to be a smart decision for a person to make. Life insurance can help to pay for final expenses, such as your funeral, bills that you owe and even to help your family survive after you are gone. This type of coverage cannot be spoken of highly enough for the main breadwinner in the family, as in the event of your death, your family will need financial assistance to make sure that everything will carry on normally.
Types of Life Insurance
There are several types of life insurance, which include:
- Whole Life Insurance: This is a permanent type of life insurance that you pay into, and the policy is built up by the company as they use this money for investment purposes. Since you build cash value each month, you can borrow against this if needed.
- Universal Life Insurance: This is also a permanent type of life insurance, but it does not guarantee an amount on death as does a whole life policy. The cash that is paid into this policy is still used for investment purposes to build up cash value. But, this is a riskier policy as you never know how much you will get.
- Variable Life Insurance: These are tied into universal policies, and you are not going to know just how much you are going to get when this policy is used.
- Term Life Insurance: This is a life insurance that is paid from month to month and renewed year after year. These are much cheaper than other options and are active as long as payments are up to date.
How Much Coverage Should You Have?
One of the most popular questions that is asked by buyers is just how much coverage is considered enough. There is no clear cut answer to this, but for the most part, financial planners recommend that a person have enough coverage that will sustain their loved ones for 5 to 7 years after their death. This is based on the current yearly income that the person earns. Other factors need to be taken into consideration such as if children are in the family, if there is significant debt or health care expenses.
Life insurance is not something that should be put off, as your health is something that is taken into consideration when giving you a rate. Thus, the better health you are in, the less you pay. Other activities that can affect the cost of your life insurance coverage are if you smoke, are overweight or have a career that is considered high risk.
Every person needs to consider their life insurance options, especially when they have others relying on them for financial needs. Life insurance can be the one thing that helps your family keep their standard of living, even after your death.