BASIC OF INSURANCE AND HOW DOES IT WORK

BASIC OF INSURANCE AND HOW DOES IT WORK:

Some basics things of life insurance. The buying of life insurance may be one of the most important decision you ever making your financial life,However its a decision that most of us put off until something happens that his close to home actually that not too really surprising since we all have a built in mechanism and that avoids thinking about our death but that kind of procrastination can be devastating to a family or business.

Let me explain there are three basic questions to be asked and they have to be asked then answered in right sequence or all the answers will be wrong.
     3 Key Questions

• Do i need life insurance?
• How much do i need?
• What kind should i buy?

     Lets take them one at a time:

1. Do i need life insurance:- The quick and easy answer is that someone will suffer financially when you die you need life insurance that could mean your family or may be your business partner and employs sometime we might be incline to say well that will be OK and may be that's true but its important to remember that we don't get a chance to change our mind once for gone. we need to face reality what we can do something about it.
2. How much should i have:- Some experts recommend the role of thumb that runs anywhere from 5 to 20 times your annual income obviously with that kind of facility the role of thumb is very helpful so, how do you determine if you need a $100,000,$250,000 $500,000 and more in life insurance coverage the best way to figure out what you need is to have an insurance professional conduct whats called the financial needs analyses here how it works you start by gathering all of your personal financial information and estimating your family members would need after you gone to need there financial obligations to calculate this figure you will need to think through.

      Three types of expenses:

    1. Immediate Expenses 

• Funeral expenses
• Uncovered medical costs
• Mortgage and other debt
• Taxes
• Estate settlement costs

   2. Ongoing expenses

• Food
• Housing
• Utilities
• Transportation
• Health care
• Clothing
• Insurance

 3. Future expenses

• College
• Retirement

After you figured out your families needs then you will want to tally up all of the resources that your surviving family members can drawn to support themselves this would includes things like you spouse's income,savings and any life insurance that you already have the difference between your families needs and the resources placed needs those needs is your need for additional life insurance.

So, after you figured out how much you need you are now ready to focus "what kind of insurance to buy ?" there are two fundamental consideration that going to answering this question.

     Type Depends on:

1. How long coverage is needed?
2. Your budget.

     Cost of Procrastination

• Families suffer
• Business fail
• Dreams get derailed

     Why life Insurance?

• Provide for spouse,children
• Support aging parents
• Protect business partners employs

     Recommended Insurance

•  Yearly income 5x 20x

     Calculating Life Insurance
     current and future financial life insurance - savings,investments,spouse's earnings and
     life insurance you already own for yourself = life insurance needed