Answers...
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1. Any wage earner who is providing support for dependents needs life
insurance. You will also need it if you are a key partner in a business,
to pay off debts, and possibly to reduce estate taxes for your heirs.
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2. Many financial planners recommend between 5 and 10 times your annual
income. The real answer is you need a lump sum to fund an account,
so that your dependents can live off the interest income for the time period you
have in mind.
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3. This depends on your situation. Perhaps you are paying for your childrens'
college education, and you want your income to be available if you die. Similarly,
your spouse may be depending on your income until he or she retires.
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4. First answer the question of how much you need. Then answer the question
of how much can you afford. If affordability is a problem, consider term insurance.
If you have discretionary funds, you may consider permanent insurance, for instance
to reduce estate taxes.
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5. If you are wealthy enough to be concerned about estate taxes,
then you might consider a second to die policy. But, wait until
age 55 or so, as too many things can change. Get help from a financial planner.
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6. Term insurance is the cheapest life insurance. Your cost will
depend on your age, health, family history, and other underwriting variables.
Choose your company carefully, as premiums can vary by hundreds of dollars.
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7. Most companies consider the same core set of factors, but their treatment
of them can vary widely. For instance, a person with cholesterol of
285 would pay $1,315 with one company, but only $730 with another company that
considered the very low cholesterol ratio.
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8. Some companies have required 6-8 weeks or more
to issue a policy. You can reduce this significantly if you apply for
the correct policy, based on your underwriting factors.
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