One of the most important financial decisions in a person's life is to purchase life insurance. Life insurance not only protects your loved ones when you are not around them but is also very useful before then. Purchasing best life insurance in Surrey can be difficult. However, the following factors can help you select the best cover for you and your family.
1. Decide the time frame
Life insurance is usually classified into two broad categories:
- Term Life - Lasts for a certain period of time. Term life insurance should be considered if you want insurance only or a specific period of time, such as the length of your mortgage or when your kids are growing up.
- Universal Life or Whole Life - Lasts for the whole lifetime. Universal life terms should be considered if you need life insurance for as long as you live. This type of insurance can be later used as a burial expense or income replacement for a spouse.
2. Calculate the cost
One popular way to determine the cost you'll leave behind is using the DIME (Debt, Income replacement, Mortality, Education) method. Let's look at each factor one by one:
- Debt: Debt refers to student loans, car loans, credit cards, mortgages etc.
- Income replacement: Considering your spouse's life expectancy or dependents of your income, you can replace your income for the rest of their lives.
- Mortality: Refers to burial wishes and costs involved in the process.
- Education: You can opt to fund education expenses for your dependents.
If you have a child in daycare, you can decide to pay for his/her remaining years in the daycare facility.
3. Determine your objectives
Apart from the points mentioned above, you can also use some permanent life insurance policies as savings. Having a lifetime term, these permanent policies have a cash value that increases with time. Permanent policies also contain a death benefit or a face amount (paid at the time of death) and a cash value that increases with time on a tax-deferred basis, quite similar to retirement plans. Being aware of using life insurance in your financial portfolio is very important.
4. Name a beneficiary
A beneficiary is nothing but the person or entity who will receive the proceeds of your policy. Avoid adding a minor child's name as children may not receive funds at an early age. Apart from that, you should also avoid adding your estate as the beneficiary as it may have tax implications. It is best to explore all the right options before selecting a beneficiary with an agent.
Conclusion
By considering the points mentioned above you can find the best life insurance cover for you and your loved ones. If you are looking for good Life Insurance in Surrey, contact AMC Insurance now!
Robert Cameron is the author of this article. For more details about Motorcycle insurance in BC please visit our website: amcinsurance.ca