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Thread: How Much Life Insurance Do I need

  1. #11
    Senior Member Level 3 Dan Williams's Avatar
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    STI...look what you started! for those few backlinks you should be forced to read every lame post on the forum



  2. #12

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    Determining the amount of life insurance you should have will be much easier if you consult an insurance agent about this first. Share all your concerns first whether you want your life insurance to be solely for the benefit of your dependents or you want to purchase a hybrid policy wherein you can also receive long term care benefits. Many would be surprised to hear this information on long term care insurance. This is the latest product the insurance industry is offering, which is actually very beneficial for people who needs long term care and still want to leave something behind to their family when they die. This is a great alternative that everyone should look into especially those who are nearing retirement.
    Last edited by taperjean; 10-11-2013 at 10:28 PM.

  3. #13
    Member Level 0 DavidBlock's Avatar
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    As the previous post just stated, income is an important determinant in how much underwriters will allow. That said, there are many companies that will use a 20 times income rule and will also look at the occupation and where the client/insured is in their career. For example, if you have a physician that is in their last year of residency, they are not making a great deal of money compared to what they will make in a year or two. So, underwriters will take that into consideration when looking at the applicant's request for insurance.

    How much insurance and for how long are the most common questions asked of insurance agents and there are no hard and fast answers. All we can do is plan for the here and now and if things improve, work with the changed circumstances at that point.
    David M. Block, CLTC
    President
    Insurance Specialties, Inc.
    PO Box 1809
    Candler, NC 28715-1809
    800.358.8844 toll free
    828-667-1119 local
    828-667-2229 local fax
    www.insurance-specialties.com

  4. #14
    Member Level 0 marindependent's Avatar
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    How much Life Insurance that someone needs can be pretty complicated if you take into account all of the factors that might be included in any life insurance discussion. Needless to say this is part of the reason that Life insurance Agents exist.

    One thing to keep in mind is that most people can use some form of term life insurance though. Some is usually better than none. Under insuring is a far less common problem than non insuring, so when in doubt it may be a good idea to at least lock in some term life.

    Professionally I do believe that over insuring is possible, but that can pretty rare.

    For a more detailed analysis most life insurance professionals will want to know your total income per person, total assets, total debts, mortgage amounts, age, lifestyle, amount and ages of kids, retirement plans, money set aside for college, assets that need protecting, and much more information.
    Scott W Johnson
    Independent Insurance in California
    Whole Vs Term
    415-294-5454 CA LIC 0K10734

  5. #15
    Member Level 0 DavidBlock's Avatar
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    Very good points Scott ... and the only thing I would like to add to the conversation is that as important as life insurance is in estate and family planning, disability insurance is as important, if not more so. I say this because most agents do not think about this sale. It is so far overlooked that once the life insurance is behind them, they move on. The client, even if they have group benefits, may still qualify for some additional tax-free benefit and this additional is often the difference between survival and bankruptcy.

    Think about it, if you were to sell a whole life (or permanent) policy, would you not recommend the client purchase waiver of premium? If you sell with Mass Mutual, New York Life, or one of the larger houses, often agents are instructed to offer waiver even on term policies (I know I do ... especially if the client is young). So why not meet all of the client's needs and sell the term policy and a disability plan to cover all of the possibilities.
    David M. Block, CLTC
    President
    Insurance Specialties, Inc.
    PO Box 1809
    Candler, NC 28715-1809
    800.358.8844 toll free
    828-667-1119 local
    828-667-2229 local fax
    www.insurance-specialties.com

  6. #16
    Member Level 0 DavidBlock's Avatar
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    To assume that whole life is the only solution is to assume a hammer is the only tool to use in construction. The reason there are so many products here in the US (I notice you are in England) is that there are multiple solutions for any given situation. Though whole life (permanent insurance with guaranteed premiums and cash value) should be part of anyone's financial portfolio the most important issue is to solve the need. If a family would require a million dollars (or pounds) of coverage would not the cost of whole life be exorbitant? And if for the allotted family dollar the family could only purchase 100,000 of coverage ... how have you helped?

    I urge all planners, agents, and brokers to be wary of the "one size fits all" model of selling and solutions. Here is the states, we have many mechanisms to solve financial/insurance goals.
    David M. Block, CLTC
    President
    Insurance Specialties, Inc.
    PO Box 1809
    Candler, NC 28715-1809
    800.358.8844 toll free
    828-667-1119 local
    828-667-2229 local fax
    www.insurance-specialties.com

  7. #17
    Member Level 0 marindependent's Avatar
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    I find that some people over obsess about the correct amount of life insurance.
    One thing is for certain, Some Life Insurance is Always Better than None.
    So choose a number rather than procrastinating.
    Scott W Johnson
    Independent Insurance in California
    Whole Vs Term
    415-294-5454 CA LIC 0K10734

  8. #18
    Member Level 0 DavidBlock's Avatar
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    The issue is there are simple techniques that brokers/agents can utilize to help clients determine the amount of coverage they should consider. The reality of a consumer's debt and future obligations can be overwhelming but need to be considered. Then, as just happened with new clients of our agency, they accepted the needed amount but their budget could not handle it. Thus, the decision was made to back into the maximum benefit based on the amount the clients wanted to allocate for insurance.

    The key from the agency's perspective was to accommodate the maximum benefit because the family need was large. At the very least this family has an idea of how far they should go and what they will need to allocate for the future. It is a healthy and helpful exercise even if it is a bit painful. It is similar to car shopping in that we would like the top of the line with all the bells and whistles but our budget only allows for a sub-compact. We need transportation so we get what we can as it is better than nothing ... even if the entire family needs to cram in to go places. At the very least we have something that will get us down the road.

    This is the same analogy as a family realizing they need millions in insurance now but can only afford hundreds of thousands; buy what you can afford but know what you need.
    David M. Block, CLTC
    President
    Insurance Specialties, Inc.
    PO Box 1809
    Candler, NC 28715-1809
    800.358.8844 toll free
    828-667-1119 local
    828-667-2229 local fax
    www.insurance-specialties.com

  9. #19
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    xrac's Avatar
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    Quote Originally Posted by marindependent View Post
    I find that some people over obsess about the correct amount of life insurance.
    One thing is for certain, Some Life Insurance is Always Better than None.
    So choose a number rather than procrastinating.
    Even a small amount can make a huge difference although a substantial amount can be a life changer.
    X

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