How Much Life Insurance Do I Need?
Life insurance is one of the mutually beneficial transactions, and those who once thought about their own savings probably considered this option. Insurance companies explain everything simply: most people with specific knowledge in their field of activity cannot also be economists. Companies undertake to earn some investment fund for the client, in other words: it is profitable to invest their money. Next up is the question of trust. Do you trust yourself enough to invest your own money? Or should you turn to leading economists and their managers, who are responsible to you with the name of their company, in fact, their own reputation?
People inclined to trust insurance companies face a choice: how much to invest and for how long? How to calculate the term? We want to live happily ever after, but it’s hard to imagine how soon we will face problems. How soon will we need to solve them using all possible financial resources.
Some companies combine endowment life insurance and medical insurance. Thus, the policyholder can afford to invest more money for a longer period. If he becomes ill, the company will give him the opportunity to receive free treatment. The longer the term, the longer the individual’s money works both for the company and for him. That is why insurers encourage long-term insurance programs.
What factors should be considered when choosing the validity period of an insurance?
- One’s own age is the most significant factor. Average life expectancy is understandable. Objectively, everyone can determine their phase of life: youth, youth, maturity, old age. Upon reaching adulthood, people, according to the logic of things, can insure their life for a maximum period.
- Important events in life. At the end of the insurance period, the client receives a large amount of money in his hands. Many people think what to spend this money on before signing a life insurance contract. A wedding, the wedding of your own children or their education, buying real estate for business, a long retirement trip, buying a luxury car – this is not the whole list of desires that people tell about if they ask the following question. What will you spend a lot of money on at 20, at 30, or at 50?
- The percent that the company pays. For many, this factor is crucial. In addition to the fact that the longer the money is in the circulation of the investment fund, the longer it works for you, there is another side. Companies often offer higher interest rates for long-term programs.
4) By purchasing real estate on credit, customers insure their own life so that in case of their death the insurance covers the loan amount. In this case, life insurance works for the entire loan period. This helps to protect relatives in the event of the most unpleasant course of events.
What are the alternatives?
Some people buy several policies. The first one, for example, covers their primary desires and makes it possible to make sure that everything is in order with the payments. Now people calmly continue to invest in subsequent installments under another policy.