« Life & Health Insurance
Determine How Much Life Insurance Is Enough
familiarizing yourself with the basic types of insurance, you need
to deterrmine how much insurance you need.
First, you should gather some personal financial
information and figure out what your family's needs would be. Here
are some things to consider when you're determining how much life
insurance protection you'll need:
* amount of final expenses, such as medical expenses,
burial costs and estate taxes;
* money to finance a short-term re-adjustment period for your family,
such as providing time for family members to find a job;
* continuing financial needs, such as monthly bills and expenses,
tuition or retirement.
There is no hard and fast formula for figuring
out how much you'll need, since each family's situation is unique,
but one place to start is to consider buying life insurance that'is
equal to five to seven times your annual gross income.
Choosing an insurance company
If you are already considering an insurance company,
There are a few things you should find out about the comapny.
First, check with your state insurance department
to be sure the company is licensed to do business in your state.
Most companies that advertise in your state are licensed there,
but it's wise to verify this anyway.
Always check a company's financial condition
before you buy a policy. You can ask your agent or phone your state's
insurance department. There are several services that rate the financial
strength of insurance companies and you can usually find this information
at your public library or get the information from the rating service.
Don't forget that most companies now have websites that will provide
this info, too.
Picking an insurance agent
An insurance agent should be willing and able
to explain all of the details of the policies you are considering
or that he or she is recommending. You should feel that the agent
is listening to your concerns and trying to find a policy that will
provide you with the right type and amount of insurance. If you're
not comfortable with any aspect of the interaction with the agent,
you should probably end the relationship and find another agent.
Get recommendations from friends, family and
other sources. Here are some factors you'll need to check with regard
to any agent:
Every state requires agents to be licensed to
sell life insurance. Also, agents who sell variable products have
to pass examinations and be registered with the National Association
of Securities Dealers (NASD) and obtain additional licenses.
Many agents will have professional designations
such as Chartered Life Underwriter (CLU), Chartered Financial Consultant
(ChFC) and Certified Financial Planner (CFP) . These designations
indicate that the agents has spent considerable time and effort
taking courses and passing examinations to gain these designations
in an effort to provide more and better services to his or her clients.
The major associations for agents is the National
Association of Life Underwriters (NALU) and Professional Insurance
Agents of America (PIA). These organizations provide seminars and
training for their member agents to keep them current with trends
and changes in the insurance business. Similar training and services
are provided for financial planners by the American Society of CLU
& ChFC, the Institute of Certified Financial Planners (ICFP),
and the International Association for financial Planning (IAFP).