Got A New Job? Make Sure Your Life Insurance Coverage Is Adequate
Have you recently started on a new job? Is it something that you looked forward to
, and does it fit right into your lifes financial plan? Or, on the contrary, is it a stopgap arrangement until you land your dream job? Whatever your situation, you will need to review your life insurance needs and make sure you are adequately insured.
Why review your life insurance needs?
The purpose of life insurance is to protect your loved ones. A new job goes a long way in providing for your family. They are assured of an income, and if they are totally dependant on it, it takes care of their every need. What would happen if you passed away suddenly? Where would they get this income? A life insurance policy of course! If you have adequately insured yourself the death benefit of your policy will continue to care for your family as if you were still around. That is why each time you get a new job or experience any job-related changes in your income, you need to review your life insurance needs and adjust it to your new situation.
Why a work life insurance policy is not adequate
Many times with a new job, we also get an employer-funded life insurance policy. However there are two things you must always remember about such policies Firstly, these policies are with you only till you work for the company. When you change jobs, retire, quit, get a pink slip, etc., your life insurance will cease and you will have to get your own policy. Life insurance deals are better when you are younger. Hunting for a fresh policy after you stop working with a company will no doubt make you qualify at higher premiums.Secondly, work-related policies typically insure you for just 2 3 times your annual income. This is just not enough. If you died, your family would find it difficult to live on that little. Remember, the death benefit needs to see them not through one or two, but several difficult years.
Therefore you need to supplement your work life policy with a privately bought one.
How much is adequate?
The recession, rising prices and many other uncertainties in life make it very difficult to arrive at the right amount of life insurance coverage. When you land a new job, promise yourself a bit of time to review your life insurance needs. This is what you need to do.List out your financial obligations, both current and future. Current financial obligations would relate to the down payment on a new house, current mortgage payments, etc. Future financial obligations would be the possibility of your parents moving in with you when they are older, kids college education fees, and your plans for retirement.Consider how much you currently earn, and how much your family will need to continue enjoying the same lifestyle you currently provide them with, in the event of your death. Work out the value of your other assets.Draw up a plan with your loved ones as to what would happen if you died. Where would they live? Would they keep the house or need to move to a less-expensive neighborhood? If your spouse or significant other stays at home would they need to take up a job? Would the kids then go to day care?The above exercise will throw some light on how much you need. Its now time to get to a specific amount. For this you can eitherUse an online life insurance needs calculator (make sure you enter the information they request as accurately as possible) orGo by the experts rule of thumb and get yourself insured for10 15 times your current salary)Calculate the figure yourself by putting real amounts for the things you discussed during the exercise above. Remember to take inflation into considerationFinally, if you already have an existing life insurance check if it matches the figure you just arrived at. It is likely to be more or less. If the difference is minimal you can leave it as it is. However, if the difference is substantially lower or higher, then you can think of either reducing it or buying extra life insurance for the difference.
Term life works best
Term life insurance is a great option for those who are starting out in new jobs or careers. Term life is economical and doesnt drain your monthly finances. After paying term life premiums you will still have enough money left over to take care of your current financial obligations and even set some aside for savings and investments. Term life even comes with attractive options these days like renewal, conversion and return of premiums.
Life insurance is an important part of your financial plan. By giving it due attention you can rest easy knowing that your familys future is secure, come what may!
by: Denise Mancini
Summer Life Insurance Checkup Ways Life Insurance Can Help You Plan For Retirement What Lifestyle Benefits Our Modern Gadgets Provide Us Be At Peace And Exult In At The Scenic Villages At Halkidiki For Your Once In A Lifetime Greek Break Long Term Care Insurance Riders: What Should You Need To Know Introduction to Long Term Care Insurance Avoiding Long Term Care Insurance Financial Mistakes Understanding The Benefits For Life Insurance Adoption And Foster Care - Understanding The Real Meaning Of Life How To Be A Successful Personal Trainer And Achieve The Goals In Your Life Life Insurance With Medical Condition Leatherette Seat Covers--Cost-effective Auto Accessories for Greater Seat Care Phone referable iPhone 4g Insurance plan at GoCare
Got A New Job? Make Sure Your Life Insurance Coverage Is Adequate Aguascalientes