Life Insurance During Harsh Financial Times
The economy and family budgets have been taking a beating since 2008 during this latest recession
. During these difficult financial times, families are cutting back their expenses, even before layoffs, in order to keep a balanced budget. Unfortunately, people often look towards their life insurance and other policies as an area where expenses can be cut.
This is actually the worst time to cut back on coverage; insurance is most needed when times are tough. Is a disaster or crisis any less harsh or the needs of surviving dependants lessened just because the economy is in decline? Obviously, the answer is no and families should not let any coverage, especially life insurance, lapse. Putting premium payments as a high priority every month is one way to ensure that everyone stays covered.
Adding To Life Insurance Coverage
Sometimes the best move to make is to increase one's coverage. Many people rely on group coverage through their employer, however, when layoffs start rolling through a company, it is very easy to lose that safety net without any notice. Individual policies are portable and will remain in affect no matter what a person's employment status might be. Best of all, if insurance companies are hurting for customers, a recession might be a good time to shop around for a very good deal. The earlier one buys life insurance, the cheaper the premium.
On the other hand, an important point to remember is that starting a new policy typically requires a medical exam. However, if a family member is already covered by their employer, supplemental group life insurance can often be converted to an individual policy without another medical exam. This is a crucial fact if someone is in poor health or even just the passage of many years since the original medical exam.
Of course, when it comes time to crunch on the family budget, reducing premium payments can certainly help as long as no compromises are made on maintaining the proper coverage level. When considering life insurance, term policies are always less expensive than whole life options. While whole life plans are often beneficial in the long run, it may be necessary to stick with term until the financial statements turn around. In addition, many companies allow their clients to convert their term plans into whole life.
Now would also be a good time to recalculate one's life insurance coverage needs. If the family situation has truly changed and less coverage is needed, than it is a responsible choice to lower the coverage and reduce monthly premiums. As always, be objective when it comes to evaluating needs and don't try to cut corners on necessary coverage because of a recession.
If making changes or additions to policy terms, always make sure to utilize a strong insurance firm. There is no reason to take a risk on a weak insurer in a week economy. Overall, managing life insurance during tough financial times can be a tough task, but it is no less important.
by: Christine Harrell
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