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Life Insurance
Things to consider about life insurance ...... There are two basic and necessary reasons to buy life insurance. You owe someone or You love someone.
How much Life Insurance is right for you? Traditionally, individuals tend to buy life insurance in round numbers - such as $100,000, $250,000 or $500,000 - or using the general rule of purchasing 8-10 times their household income. Few actually try to determine the correct amount to purchase. While doing so is a relatively simple process, it can be uncomfortable for some because it involves thinking about death. Given the importance of this issue to survivors, the best solution is to move beyond that discomfort and plan accordingly.
Determining What You'll Need Determine how much will be required to pay off any remaining mortgage balance on your primary residence. Providing an education fund for your children is also critical. There are many schools of thought regarding this, but you must consider how much money you would like to see allocated for your children's education in case of your death. The final issue is often the largest - income replacement. If you have taken care of the above-mentioned needs, most studies indicate that a typical family can maintain its standard of living on 60-75 percent of pre-death household income. While it is a personal choice, you must consider whether the beneficiary will live off the principal paid by the policy or the income it generates through investments. It is also important to consider the length of time this money will cover. Most families decide that this should last at least until your children are out of college.
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