Customize Your Insurance – Part I

Insurance is a word that usually doesn’t sit well with people. Why? Well we all know of insurance as something that costs us money. There are no buts about it, insurance costs us money. Whether it’s home insurance, life insurance, car insurance or what have you, you will be spending money on it. Some people chose to avoid insurance just because they don’t want to deal with the costs. In my opinion this is not a good idea. So instead of telling you to avoid insurance altogether, I’ll be explaining to parts of insurance which you can avoid in order to save. I will cover 4 types of insurance: Life, health, auto and home. They will all appear in different “parts,” I, II, III and IV.

Please realize that insurance is a very important matter and is not one to be taken lightly. This article is meant merely as a guide to use when deciding what you may and may not need.

Life insurance is a great way to make sure your family members and loved ones are properly taken care of if anything tragic was to happen to you. A lot of people have a hard time deciding on a policy that fits them best without too much confusion or paying too much. First thing to do is to decide whether you actually need life insurance or not. Ask yourself this question “How many people depend completely on my income for their lives?” If you answer zero than continue reading as this will not help you.

When looking for life insurance chances are companies will spam you with dozens of different types, pay no attention to these, the only type of insurance you should be looking for is “term life insurance.” Everything else is a waste of time and money, don’t even bother. Now we look at another decision, how long of a term do you want your policy to last? It is suggested that you enroll in a term which will last until your youngest child is old enough to finish school and enter the workplace, 22-24 years of age is optimal.

How much should my policy be worth? Is the next question you should be asking. Well that’s up to you but a good figure to work with is from 10-20 times that of your annual income. This will give your beneficiaries not only plenty of money to live on, regardless of when you pass but also give them money to invest in bonds which can earn quality interest. This way on a $500,000 policy your beneficiaries can earn $25,000 per year off bond investments without even touching the principle money. Obviously they can earn even more if your policy is worth more.

Reputable companies are also a must when investing in a life insurance policy. The number of “fly by night” insurance companies is staggering, and what could be worse than leaving your loved ones with a false sense of financial security?