Life Insurance: Three Things Your Broker Should Tell You

by Alex Musk

Subjects such as death, disability, and illness are still taboo. But the pandemic has increased the perception that these risks exist and, therefore, more and more have sought Life Insurance as a form of support to deal with eventual situations.

CMS Life Insurance is protection for people who depend on you financially, including yourself, if you die or become unable to work. Thus, it should not be seen as an expense but as part of financial planning.

Below, we separate three questions that often generate confusion in those who want to hire the product. Follow:

 

How to calculate the value of the Life Insurance indemnity?

There is no formula for calculating the amount of compensation. In general, it is recommended to estimate the amount needed over a period of two years to support your dependents – and even yourself – after the eventuality. But it can be more, depending on the needs of each one.

When doing the math, take into account two points:

  • How much of a financial reserve would be needed for your dependents to support themselves in your absence? For example, there are those who want to guarantee their children’s education or lifestyle during this period.
  • How much money is accumulated in investments that could support your dependents or you right away? Cars and real estate, for example, should not be included in this calculation because they do not have immediate liquidity.

With these numbers in hand, it is easy to know how much indemnity the insurance should have.

 

 

How to choose Life Insurance?

Again, it will depend on the priority of each one. Life Insurance includes a huge variety of coverages, so it’s worth talking to a trusted broker to choose the ones that are important to you. Among the most sought after is coverage for temporary disability, which entitles you to compensation in cases of serious illnesses, such as stroke and cancer, to help pay for treatment.

There are also other benefits that can be included, such as home, travel, pet, or telemedicine assistance. Assess your real needs to add only coverage that makes sense and thus not spend more on insurance than necessary.

 

Should everyone have Life Insurance?

No. Those who have accumulated a financial reserve or have a family with money are less likely to need Life Insurance. Compensation in the event of death makes sense for people with or intending to have children; coverages to be used in life are useful even for those who do not have dependents but depend on themselves and have no financial reserve.

When evaluating the purchase of insurance, ask yourself: If I died today, would my family members need compensation to support themselves? And if I was unable to work, would I be able to support myself without insurance money?

 

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