Should we make our term life insurance quotes very personal?
Shouldn’t we do some serious thinking and may be some research before we get our term life insurance quotes?
Is this important enough to make certain we do it right?
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After all, we are talking about our family’s future here or in some cases a business that we have put a lot of effort into building, a business that sustains us.
Why would we want to get term insurance quotes? In what amounts should our quotes be? How much are we willing or able to put into our term policies?
The answers to these important questions vary according to the situation and the types of policies we favor. Term life insurance is favored by many but, contrary to common opinion, so is whole life insurance.
We are talking about term insurance here so we will try to focus on that type alone.
Each family situation is different and peoples living standards vary. These things are important factors in determining what kind of term life insurance quote you want and in what amounts.
A man is married and he has 2 children ages 3 and 5. His income is $6000 per month and his wife doesn’t work. She prefers to stay at home to make certain that she raises her children the way she wants them to be raised.
From time to time she takes a part time job to help make ends meet. She makes certain her working hours are at times when the children are at school…
Do these people need life insurance? How much would be adequate? People sometimes fool themselves into believing that the amount of income required will be less because they are out of the picture. Nothing could be further from the truth.
If it costs $6000, less taxes, to live now it will cost the same amount to live after the death of the breadwinner. Cost of living increases every year. I won’t go into the details at this time.
As the children get older they want or need to get involved in certain activities that cost more money.
This person should be thinking in terms of getting term insurance quotes that would provide sufficient insurance to guarantee that the $6000 per month income would continue after his death.
$6000 per month is $72,000 per year. It is fairly easy to get a pretty high return on that type of money but to be safe let us assume an interest rate of 5%. $1,440,000 of life insurance would provide that $6000 income…and the principal would stay in tact.
We now have to consider the type of policy we want to buy. We should also consider what period of time we need the insurance for.
If we want the income until the children graduate college the we must calculate the number of years between the youngest child’s present age and the year that child is likely to graduate college.
A 15 year term , a 20 year term or a 25 year term policy policy usually fits most situations. Here is where we check out our term life insurance quotes…
If these policies are too costly then you should consider a 10 year term life insurance quote with the intent to convert later.
You should not forget that the principal, the insurance proceeds, would be left in tact if you set up your plan in this manner so the wife will have the income continue after the children are grown if she so chooses.
She should also have the option to take the lump sum if she wants to.
Now let us consider another type of situation where a good term life insurance quote may be required. As the requirements of partnerships and small corporations are similar in some ways we will discuss them together.
The agreements are set up differently depending on the type of business and the ownership and beneficiaries of the policies also differ.
If you own a business you need to buy some life insurance. Company A has a going concern value of $3,000,000 at present.
There are 3 partners or, in the case of corporations , stockholders. Each partner or shareholder owns 1/3 of the stock. One partner dies.
This could cause great problems for the survivors. The heirs of the deceased shareholder are certainly entitled to the true value of his or her shares…
Can the business come up with $1,000,000 at the time of death? The business owners need to get together with their attorneys and accountants and set up buy-sell agreement funded by life insurance.
Upon death the proceeds would go to the company and would be used to buy out the shares of the heirs.
It is quite a simple matter to get term life insurance quotes to fund the agreement. As to the type; that would depend on company practices. How far ahead do they look when planning?
As most companies tend to plan 20 years ahead it would serve the officers of the companies well to examine 20 year term life insurance quotes and comparisons.
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