Life Insurance Quick Tips
Quick Tip # 1
Prior to issuing a policy the insurance company will review such things as your medical history, hobbies, credit rating, alcohol-related issues and driving record, just to name a few. In addition most life insurance policies will also require you to undergo a medical examination checking for high blood pressure, cholesteral, nicotine, and blood sugar levels.
The exam can be done in the privacy of your home or at the convenience of your workplace. It is conducted by a professional paramedical, and paid for by the insurance company. Factors such as age, smoking, prior health issues, and family history are taken into consideration and can affect the cost of your insurance premiums.
- For at least 24 hours before taking your medical exam, make sure to keep sugar & caffeine out of your system. It’s best to schedule your exam early in the morning, and don’t consume anything but water for at least eight hours beforehand.
Quick Tip # 2
Because the death benefits of a life insurance policy are exempt from federal taxation, many financial planners often use clients’ life-insurance benefits to help pay for the estate taxes generated upon the death of a loved one. Although life insurance can be a great financial planning tool, it should never be thought of strictly as a savings vehicle.
- There are other investment options outside of an insurance policy that may also be worth considering as a part of your overall financial strategy.
Quick Tip # 3
Obviously there are other people in your life who are important to you, and the question of whether or not to insure them may have crossed your mind at some point. Because the primary purpose of life insurance is financial protection, the death of a child for instance, albeit emotionally devastating, should not be a cause for financial loss therefore insurance is unnecessary.
The death of an income-earning spouse on the other hand, would create a completely different scenario resulting in not just emotional but financial losses as well. Life insurance should definitely be a consideration. This same logic can be applied to business partners with which you have a financial relationship ( for example, shared responsibility for mortgage payments on a co-owned property ).
- As a general rule, you should only insure those people whose death would create financial losses for you and your family.