4 Key Components Of A Properly Structured Life Insurance Policy

Have you given thought to getting a new life insurance policy? Are you struggling to determine how much insurance to get? Do you get a low face amount for a low price or a high face amount for a higher price?

These are the questions that most people think about when they decide to get a life insurance policy or increase the face value of the one they currently own. The truth of the matter is none of the answers to those questions should be the determining factor. You need to look at what is your ultimate goal? What or who are you trying to protect? Remember you can't take it with you when you go, so why not prepare it for your loved ones who will remain. You should be focusing on leaving enough funds so that your family can go on without their life being disrupted. How do you determine that magic amount to keep their lives from being turned upside down? By using these 4 simple letters, D-I-M-E, you can properly structure you live insurance policy to cover everything your family will need to continue on.

D is for Debt.

When we die the last thing we want our family to worry about is paying back the unsecured and secured debt (not including a home) that we had. They should not have to be worried about someone knocking on their door for payment on a bill you created. To prevent that, be sure you have enough coverage to pay off all those bills. These bills will have a payoff time frame of 5 years or less and will included bills such as credit cards, vehicle loans, and personal loans.

I = Income.

Are you a 2-income household? Can your spouse or significant other maintain the household expenses if you were to pass away? Most likely not. Even if you have the standard 3 to 6 month suggested reserve, you will eat through that in no time. With a properly structured life insurance policy, you will have enough coverage to sustain your income, not for one or two years, but for YEARS to come.

M = Mortgage.

Earlier I mentioned that you needed enough coverage to pay off secured and unsecured debt, excluding your mortgage. This is because your mortgage should be a separate coverage. In order to prevent unwanted change due to the moving of your family to a brand new location, your policy should be structured to payoff your loan balance, or your portion of the balance in a joint situation, IN FULL.

E = Education.

We all want are kids to grow up and go to college. And not just any college - THE BEST COLLEGE! And we all know college gets more expensive with each passing day. How will your surviving spouse pay for this education after your untimely death? With a properly structured life insurance policy of course! If the policy is properly structured, and started soon enough, you, or your surviving spouse, will have enough reserve to pay for the best school for all four years for EACH child.

To schedule a discovery session to determine if your current policy is properly structured, contact the author.

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