(KTVI) - Life insurance used to be one of those financial products most adults invested in, but not anymore.
Matt Allgeyer, a financial planner with Wamhoff Financial Planning and Accounting, talked with Elliot about choosing the best life insurance.
1. Determine what type of life insurance is best for your situation:
- Evaluate how long you will need it, and identify its purpose.
- Term and Whole Life are the two most common types. They serve specific and important purposes.
- Term is a smaller, short-term premium, and covers a certain period.
- Whole Life is normally a long-term, higher premium policy and lasts one`s entire lifetime.
2. Your company provided life insurance is probably not enough
- Though very inexpensive, it is rarely portable, so in a volatile job market, it is important to have personally owned life insurance that stays with you regardless of where you work.
- If you leave your job, voluntarily or involuntarily, you don`t leave yourself without coverage.
3. Critical decisions about life insurance - when, how much, and where.
- Many people decide to buy life insurance after a life changing event - marriage, birth or adoption, divorce, or the purchase of a new home.
- Ask yourself: would anyone be financially devastated if you died prematurely.
- The younger you are when you buy life insurance, the lower the premiums as age and health are factors.
- How much do you need? Most experts suggest three times your income plus debt.
- Because buying life insurance can be an emotional decision, it`s good to get the advice of a financial advisor to help you in your overall planning and give you a range of options.
- As with your investments, it`s a good idea to diversify your life insurance by purchasing varying amounts of both types - term and whole life.
- Diversification in this manner will help you cover the risks for today while you continue to plan for tomorrow.