How Much Does Life Insurance Cost
The number one question most people ask when discussing life insurance is, “how much is it?”
Unfortunately, that is the wrong question. Protection is the primary function of most insurance policies, although some people capitalize on the risk free growth potential of life insurance. People are looking to either protect someone or something. In essence, anyone seeking to purchase insurance should ask themselves, “what it is they are to accomplish?”
Getting a life insurance quote hastily without determining an ultimate objective is an error that many people make. This lack of understanding between the insurance consumer and the agent, tends to lead to frustration and the client remaining uninsured. If your goal is leaving a legacy, investing, protecting your family, or simply paying for your funeral expenses; it conclusively determines which policy best fits your needs and subsequently your monthly premium.
In effort to further clarify; insurance for the most part is the management of risk. To effectively manage risk, a person has to determine what they’re protecting and for how long. For example if your main concern is ensuring that your family keeps your home in the event of a premature death; you would want to purchase enough life insurance to cover the balance of the mortgage for amount of years remaining. In this scenario you may come to the conclusion that you only need a term policy of $200,000 for 15 years which will be significantly cheaper than purchasing that amount of insurance as whole life insurance. To be more precise you may select to purchase a decreasing term and save even more money per month.
In closing here are a few questions I ask prospective clients before discussing life insurance. If life insurance were free, how large would your life insurance policy be? If you don’t make it home tonight, where will your family be in 90 days? Finally, would you rather have cheap insurance or free insurance?
Personal Insurance Advisor
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