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One of the most common questions asked is how much life insurance should I purchase. While there is no set answer, each individual and family needs to look at their exact needs and situation. Here are some broad factors to consider.

Look at your current and future needs. If you have a family or a spouse that is largely dependent on your wages to live, you might want to make sure that you have a life insurance that will cover your family and spouse for 20 years or more. Some people usually go with the philosophy that you are better off over insured, then not having enough insurance.

Some financial planners state that at minimum, you should at least have a policy of 15K to cover burial and all final expenses. In addition, some financial planners advise you to purchase life insurance by multiplying your salary, for instance, purchasing 5 times or 10 times the amount of your salary.

Other financial planners, advise you to look at your family or spouses expenses for the amount of years that you want to cover them and figure out how much money they will need to live comfortably. Many financial planners and life insurance agents have special formulas that can figure out how much insurance you need for your age and level of coverage you want to provide your spouse and children.

Many people want to make sure that their family is very comfortable in the event of a death. For instance, a policy might take into consideration the cost of a home, car loans, maintenance of assets and education costs for children. Usually the more dependents, the more insurance is necessary.

Some consumers that are buying life insurance don?t necessarily purchase it to care for dependents, but to cover estate taxes or to give an inheritance to their heirs. Usually these types of policy holders are already well off or no longer have bread winning responsibilities that make it necessary to care for small children or a spouse.

Lastly, if you are single, do not have any dependents and have an adequate amount of savings to take care of any final expenses such as funeral costs and taxes, you might decide you do not need to purchase life insurance at all.

One thing is for certain, make sure you put lots of thought into the amount of life insurance you do purchase and talk to a financial planner, accountant or insurance agent to learn more about how much life insurance, you personally should purchase.

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When it comes to buying life insurance the most important comparison is between term insurance and whole life. Here is an explanation of each.

A term life insurance plan provides life insurance – plain and simple. A whole life insurance plan provides life insurance but also accrues value, which you can cash out or borrow against. It generally takes about three years to see any value and then it’s not a lot of money. Term life insurance, in comparison to whole life, is considerably less costly for this reason. Some will refer to term life insurance as renting insurance rather than buying it. The reason for that attitude is that, much like auto insurance, you pay the premium each month or quarter or year to hedge against the bet that you might have an accident (in the case of term life insurance the accident is death). If you don’t have that accident, in the case of auto insurance, or if you don’t die in the case of life insurance, you don’t get the money.

We all die, of course, so it might seem that term life insurance is a good bet and the best bet in comparison to whole life. You would, you surmise, always get your money back. The catch here is that term life insurance will end at a certain point – and that point may well be before you are deceased. Term life insurance plans are only good until a certain predetermined age – many are 70 years of age, others up to 80. For those of us who really need this coverage until the day we die these aren’t good plans in comparison to whole life which will be in force until the day we die.

Term life insurance is a good buy in comparison to whole life, however, if all you are trying to do is set money aside to prevent your young family from becoming destitute in the event of your unexpected death. Once you reach the age of 70, the likelihood is that your children will be comfortably on their own and not dependent on your money or income to survive. Of course, if this is your only life insurance and it goes away before you die then your family or someone else must bear the cost of burying you. That is where whole life insurance is a favorable comparison to term life. Whole life will stay in place as long as you do, and will be there when it comes time to pay for your burial.

It may be, then, that in doing a comparison between term life insurance and whole life insurance, the results indicate a need for both. Many professionals suggest that you buy an amount of term life insurance that would keep your family bills paid for a predetermined time in the event of your untimely death, choosing a term that covers them only until they are old enough to take care of their bills on their own. These same professionals suggest as well that you also buy a whole life insurance policy for an amount of %7000-%12,000, merely to assure that your family will have money to bury you.

In other words, if you are 40 and your children are 6, 8 and 10, you’re going to need about 15 years of term life insurance – until your youngest is through four years of college. You might decide, with three children and a spouse that you’ll need several hundred thousand dollars of coverage. A Whole life policy of %10,000, however, would be plenty to provide a decent funeral and burial.

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A life insurance policy is a huge purchase. Think about it ? your life insurance policy can help you and your family in times of financial stress while you?re still alive, and they can help your beneficiaries, who are usually your family members, in times of financial stress after you?ve passed away. Naturally you want to purchase your life insurance policy from a reliable life insurance company; but, which companies are the best? Those which are financially strong and customer-focused.

To ease your worries, most life insurance companies don?t suddenly disappear due to financial struggles and/or bankruptcies. This is because the business of selling life insurance is heavily mediated, and in order for a life insurance company to be approved to do business in a state, it must prove itself to be financially secure and reliable. So, you shouldn?t feel too hesitant about purchasing a life insurance policy from a life insurance company that hasn?t been around very long if that life insurance company offers you a great package; however, if you feel more comfortable choosing a reliable life insurance company that?s been around for decades, you can find the top rated life insurance companies by checking out the different ratings given by independent research companies.

Once you have decided on a few life insurance companies that seem reliable, reputable, and worthy of your business, it?s time to do your own research. You definitely want to choose a life insurance company that offers friendly and accurate customer service, whether you decide to complete the transaction face-to-face with an agent from the life insurance company, or make the purchase online and by telephone. Schedule an appointment with an agent or call a customer service representative with any questions you have about their life insurance policies. Their patience and the thoroughness of their answers will give you a pretty good idea as to whether or not you want to do business with them.

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Though Life Insurance is neither an investment plan nor a savings scheme, it still plays a significant role in the financial portfolio of most individuals. The main purpose of Life Insurance is to protect the dependents of a person from financial loss in the event of his death.

Financial obligations arise out of many situations in life like when getting married or divorced, having a baby, buying a house, sending your child to college, starting a business, taking care of a parent who is aged or sick or on retirement. If a person is shouldering these responsibilities he must ensure that these obligations continue to be fulfilled even after his death. If he has a family who depends upon his earning capacity, he is a perfect candidate for life insurance. A person should consider the long term as well as the short-term financial obligations to decide whether he needs life insurance. The questions to ask are:

1. Do you have people including family and business partners who are financially dependent upon you over a long period of time?

2. In the event of your death, do your dependents have enough assets and resources including liquid cash to take care of all their needs and to pay off your financial debts?

The second question requires a further assessment of the short-term financial needs of the family of the deceased. These include working out the following factors:

Inheritance procedures can be time consuming and the family will need funds till they get access to the property of the deceased.
The availability of other liquid assets like bank accounts or stocks can reduce dependency on life insurance.

The existence of a large amount of non-liquid assets as against liquid assets makes it necessary to have insurance.
The amount of debts and taxes the person stands to owe after his death.

Businessmen must ensure there is enough cash flow in the business for his inheritors to maintain his business.

Considering the above questions, one would find most people do need life insurance, though one can do without it if one has no dependents or young kids to support. Still, other obligations like a home mortgage or a sole proprietary business or planning for a comfortable retirement for yourself or your spouse are some of the reasons why a life insurance is still a good financial program to pick up.

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To gain your business many independent life insurance brokers and many insurance companies now offer free life insurance quotes on the web. Many allow you to compare their rates with those of their competitors. But comparing rates is not always the answer. It’s important to research the companies premiums as well as their ratings.

An insurance company’s financial strength is important in that you will have comfort and confidence knowing that they will be able to pay your claims or your life insurance benefits. Additionally insurance company ratings are administered by independent companies. These ratings give you a general idea on the aspects of a company’s financial strength.

Ratings For Life Insurance Companies

Best’s A+ Superior

This is the highest grade an insurance company can achieve. Companies with a Best’s A+ have a superior proven ability to meet their financial obligations with their policy holders.

Best’s A Excellent

Companies in this classification also have an excellent financial performance. Not as strong as an A+ company but still more than capable of meeting their financial obligations.

Best’s B+ Very Good

Again going down the list…. these companies have shown a “Very Good” ability to meet their financial obligations to their policy holders.

Best’s B Good

Insurance companies with a B show a good ability to meet their obligations, but not as strong at the previous grades.

Best’s C+ Fairly Good

Again, a fairly good overall performance

Best’s C Fair

and finally a C means the insurance company has achieved a fair ability to meet their financial obligations.

There are of course other rating services besides Bests. Standard + Poors, and another company, Moodys are also well regarded as life insurance rating companies

How To Get The Best Life Insurance Coverage For You

Overall you should find a company that is minimally rated A and preferably an A+ or more. Remember this is your money you are spending and that the benefits may not appear for many years. These are two good reasons to make sure you have the right company for your life insurance.

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Buying term life insurance for your family is a great gift that you can offer them by allowing them to continue to live in your beautiful new home, even if you should happen to pass away unexpectedly before the mortgage is paid off.

Buying a home for your family can be an extremely tedious, stressful and lengthy process. Your emotions will run the full spectrum from fear and anxiety to total elation, and you will probably find yourself wondering if it?s the right decision, or if you really can afford it. You?ll probably sit in anticipation, waiting for problems, cancellations, but then escrow will finally close and you find yourself relieved beyond words because you finally are the proud owner of your own home. In these joyous moments, it is difficult to think about the potential of a tragedy, but thinking about term life insurance is an unfortunate but necessary part of every family’s financial planning plan.

Term Life Insurance is the Best Protection

Term life insurance policies are straight forward in nature. You buy a specific face value of insurance with a certain time period of coverage. There are several factors that contribute to the face value of your term life insurance quote. The traditional rule of thumb for purchasing term life insurance is usually to aim for between five and ten times whatever your annual salary is, but your debt and yearly expenses should also come into play. Length of time that your term life insurance rate is set for will also differ. This is typically based on the age of your children, and how much income you anticipate to have once they are grown and self-sufficient. Take both the loan amount and the time frame into consideration when choosing a term life insurance policy if you want to best protect your family should you pass away unexpectedly before they can take care of themselves. Check out http://www.equote.com/li/life-insurance.html for more information about term life insurance.

When it comes to buying term life insurance for new homeowners, the most important consideration is whether or not your life insurance payout will be enough to pay off your mortgage as well as to support your family until they can support themselves. Even if your spouse decides to take on the monthly mortgage payments for tax purposes, will the insurance benefit offered to him or her be enough to sustain them completely for the rest of the time on the home loan?

3 Key Term Life Insurance Tips

1) All term life insurance policies are developed to be the most cost effective but you should still shop around because there are deals out there.

2) Shop around and obtain as many term life insurance quotes as you can to ensure that you are getting the best price and the best coverage to protect your family in the event of your death. You may find the exact same coverage in several different carriers, but may be cheaper in some states and much more expensive in others. A great place to start searching for term life insurance quotes is at http://www.equote.com/li/term-life-insurance-quote.html.

3) Make sure you are getting the right kind of term life insurance. Because there are three different forms and each is a little different and offers a different level of benefits at different monthly rates.

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Our portfolio of Michigan Life Insurance companies offers specialized options to help protect and manage your estate.
Life Insurance Michigan

• Michigan Term Life Insurance
Inexpensive option and provides a tax-free death benefit to your beneficiaries with coverage for a fixed period of years (5, 10, 15, 20 and 30) depending on your age at the time of purchase. Term life does not accumulate cash value.

• Michigan Final Expense or Simplified Issue Life Insurance
Helps pay for final expenses upon death. These plans usually provide up to $5,000 to $30,000 in benefits and sometimes do not require medical examinations. However, issuance of a policy is often not guaranteed and may depend on answers to questions set forth in an application. A final expense policy is usually recommended for older consumers who just want a policy for his or her burial. However, final expense life insurance is also bought by younger consumers looking for the same protection.

• Michigan Whole Life Insurance
Offers a guaranteed death benefit, generally free from federal income tax. The policy has a level premium guaranteed to never increase. The policy holder is also eligible to earn dividends, if paid out by the insurance company. These dividends can be paid back to the consumer, or used to buy more life insurance. The whole life policy also allows you to borrow from the cash value on a generally tax free basis.

Frequently Asked Questions

1. Do I need a doctor’s physical before getting a Michigan life insurance policy?
Most Michigan life insurance companies require a paramed. They will send someone to your home or work to perform a check up that might require blood work and a urine sample. Policies with higher death benefits usually require a more in depth checkup that might include an electrocardiogram, etc.

2. How do I know what amount of life insurance is right for me?
At the Palmer & Associates group, we sit down with you and map out your assets, liabilities, and dependents. At that point we recommend how much life insurance you need.

3. What if I am young and healthy? Should I still buy a Michigan life insurance policy?
We always recommend you plan ahead. We do suggest a life insurance policy, as at a later date and age you may find yourself in a high medical table for price, or even uninsurable. Might be wise to lock in a lower price now, then risk a high price in the future.

4. I have a life insurance policy from my employer. Is that enought coverage?
The typical answer to this question is “no”, it is probably not enough. First, what if you leave your job and life insurance is not offered at your next stop for employment? Second, rarely do I see a life insurance policy from an employer that is sufficient. I always recommend sitting down and doing an outline of all your liabilities and assets to truly see how much life insurance is needed.

5. Can I name my children as a beneficiary on my life insurance policy?
Yes, but I always suggest this be done within a legal binding Michigan will. The legal documents should appoint an executor to manage the money and a guardian to take care of the kids. Palmer & Associates partners with a highly respected Estate Planning Law Firm out of Troy, Michigan. Contact us today for more information.

6. Should I buy life insurance for my children?
I do recommend a small permanent policy for child as it does two things. One, it helps through a transitional stage in the horrible event if you do lose a child. Two, is it locks in a very affordable rate for life insurance for your child.

7. What is mortgage protection life insurance?
Mortgage protection life insurance has been pushed here in Michigan for the last five years or so. Typically when your buy a new home or refinance, you get a letter saying “congrats, your eligible for life insurance coverage with no exam.” A Michigan mortgage protection life insurance policy is a life insurance plan built around how much you currently owe on your home. Typically, it is a non-medical policy which means no paramed is involved.

8. Would you recommend a Michigan non-medical life insurance policy?
I do not blame consumers who do not want to get a paramed for their life insurance policy. The issue with that is, non-medical life insurance is usually more expense than life insurance plans where the consumer did a paramed. We present the options to the consumer, and let them make the choice.

With over 60 life insurance companies at our disposal, we are very confident we can find the best product for your situation. I see many families left in the dark because consumers did not have any life insurance when they passed.

Do not leave that burden to your family! I have seen it up close, trust me! Request your life insurance quote today. Contact me to get life insurance information for yourself. Also, contact me if your life insurance policy is more than two years old. Michigan life insurance prices have dropped in the last few years.

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Whole life insurance policies are the most expensive policies on the market due to the increasing cash value over time. This isn’t necessarily a bad thing as whole life insurance is permanent life insurance that covers you for as long as you live. This differs from term life which has a cheaper monthly premium but only lasts for a set period of time. But whole life insurance is up to 5x more expensive, so you need a good reason to buy it.

How Should You Choose Your Whole Life Insurance Policy ?

When people shop for life insurance, they usually take the cheapest monthly premiums, which may or may not cover their needs. The main consideration for buying a whole life insurance policy is that it will last your lifetime if you continue to pay the premiums.

With whole life insurance, your death benefits will never decrease and the premiums will never increase. This would differ from term life insurance, where your premiums will increase when the term of the policy expires.

What Do Whole Life Death Benefits Do For Me?

When you are trying to decide how much of a death benefit you need, examine what your financial situation would be if you died. How much money do you owe on your mortgage? How much do you owe for your car, credit cards and the children’s education? Also how long would it take your family to replace the loss of your income? And do they have the means to do it? With whole life insurance, the death benefit would pay off your debts and possibly provide income for your beneficiaries. One of the main benefits however is that you can borrow against the whole life policy.

When Is The Best Time To Buy A Whole Life Insurance Policy?

Like any type of insurance the best time to purchase a policy is now. The younger you are when you buy your whole life insurance policy, the cheaper the premium will be. There are many benefits to taking out a policy, but we recommend talking to an independent broker to discuss the options available in whole life insurance.

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When was the last time you took a serious look at your life insurance coverage. Life insurance was created to provide cash for your family in the event of your death. The goal being to provide your beneficiaries a means to ease the financial burden that results from the death of a parent or spouse. The beneficiaries may choose to use the benefits of a life insurance policy in any way they choose, such as paying for funeral expenses, covering mortgage payments or investing the proceeds and taking systematic payments to augment income. Generally, the death benefit from a life insurance policy is paid free of any federal tax.

One of the most important questions to ask when evaluating life insurance needs is the amount of coverage needed. Many financial planners recommend an amount of five to seven times gross annual salary as a guideline when purchasing life insurance, but as with all things in life, each family’s goals are different. It is always best to take an inventory of your family’s current financial situation and then try to evaluate future needs. Listing current and anticipated future expenses, as well as income sources is a good place to start. If there are children, you might want to consider the cost of their education. The younger the children, the more of a need for coverage, due to the length of time they will be dependent on one parent, in the event of a death of a parent. Of course, this is exactly the time when a family may have the least amount of income available for insurance!

This is why there are different types of policies available. The two broad categories of life insurance are :

? Term Life Insurance

? Permanent Life Insurance

Term Life Insurance provides protection for the pure cost of insurance for periods of 5, 10, 15, 20 or 30 years and is usually significantly less expensive than permanent insurance. The death benefit is only paid if you die during the specific term of the policy. At the end of the term, the policyholder may be able to convert to a permanent policy or begin a new term, at a higher cost.

Permanent Life Insurance provides protection as long as you continue to pay your premiums, which can be fixed or tailored to your specific needs. Permanent policies include Whole Life, Universal Life and Variable Universal Life. These policies have a “cash value” feature, which means part of the premiums go into an account which builds up monetary value over time. This is why the cost of a permanent policy is higher than term. Many times a combination of the two types of policies can provide coverage and savings in stages for a lifetime. Feel free to contact me if you would like to review your insurance needs.

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Term life insurance policies are very popular these days, and of course, they can provide very valuable protection at a low cost for many people. However, the problem with term life insurance is that it expires just when the covered person would find it harder to find protection, after ten or twenty or thirty years, the term life insurance expires. The theory behind term life insurance is that by that time the insured person will have less obligations, and they will have enough money saved to self insure.

However, we find many senior citizens and retired people who have not had the good fortune to be free of obligations, and with sufficient savings to cover their debts, final expenses, and other obligations. Also, by the time we reach maturity, we may also have developed more health problems. As if an advanced age were not enough, health problems may make us very tough or expensive to insure at all!

However some life insurance companies have developed senior life, guaranteed life insurance, or final expense life insurance programs to meet these needs. These are, basically whole life insurance policies. This means that the policy will stay in force as long as the policy is kept in force. A policy is usually kept in force by paying premiums, or by having the policy ?paid up?. Yes, many whole life policies can be paid up over a period of years, usually ten to twenty years. In this case, an insured person can relax, knowing they will have life insurance for their whole lives, and not just for a period of years.

These type of senior life insurance or final expense policies come in two types that do not require a medical exam. For a face value that usually ranges from %2,500 to %25,000, many senior life insurance companies will offer simple issue and guaranteed issue life insurance policies. Because the face value is lower, and so the risk to insurance companies is lower, you can find some more relaxed requirements to gain affordable coverage for life insurance. Seniors can leave this money to a beneficiary, usually their spouse or children, to cover burial expenses, settle final debts, and leave some money as an estate.

Simple issue life insurance policies provide immediate death benefits. They do as health questions on the applications, but the great majority of seniors can qualify. They usually only declined applicants who have a terminal disease, or are in a nursing home. So smaller health issues will not prevent an applicant from obtaining coverage. Since the coverage is immediate, as soon as the insured person is notified that their policy has been issued, they will be covered.

Guaranteed issue life insurance policies do not ask any health questions at all! Instead they underwrite by delaying full coverage for a period of months, from 24 to 36, or 2 to 3 years. If the insured person passes away during this qualification period, they will refund all premiums with a specified interest rate. For an older individual with serious health issues, this is still a no-lose deal.

If you are an older person, or if you are concerned about paying final expenses for your parents, consider a senior life insurance policy. It will be much easier to pay an affordable monthly premiums than to come up with several thousand dollars for a burial and other expenses after the person dies.

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