In a piece for InsuranceNewsNet, Damon Carr, owner of ACE Financial, said insurance is the only product that consumers need to purchase but hope never to use. Planning for life insurance is vital to the stability of financial assets in the event of a death, and safeguarding the future of family members and loved ones.
According to Carr, life insurance aims to replace the income or economic value of the policyholder, aiding dependents in the event of a death. The life insurance policy can help pay for ongoing needs of surviving family members. While some policies also build a cash value or serve as an investment tool.
Carr recommends consumers consider a 20-year term life insurance policy valued at 10 to 15 times the policyholder's annual income. Many expenses do not exist while the policyholder is still alive. For example, if a father dies, a mother might have to hire a nanny to help take care of the children while she is working all day. This expense should be considered when selecting a policy.
In addition, Live Insurance News recommends consumers consider purchasing life insurance products in their children's name. A good way to purchase a policy for a child is through a term life insurance policy. Term life insurance is generally less expensive but still retains benefits.