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Picking the Right Life Insurance Policy

Posted by | Posted in Life insurance tips


There is nothing that could be more important to the longevity of the family then picking the right life insurance policy. The right life insurance policy will facilitate the passing on of assets to descendants and other dependents no matter what the terms of death, and can even serve as a buffer to the incredible tax burden that people incur at the point of passing.

There are many different types of life insurance policies, each available for people in certain situations – those with a great deal of children, and those with only one or two. There also life insurance policies for those who have no children, or for those who want to leave money to other people. Below are some of the tips on which life insurance policy to pick based on your individual situation.

– How much money you have

If you have above $3.5 million in total assets, including real estate, you will definitely want to look at a particular kind of life insurance policy that protects assets above this arbitrary marker. Above this marker, the tax burden for passing on assets becomes a great deal more heavy, and so you definitely want to make sure to protect your assets from Uncle Sam by picking a life insurance policy that deals with high net worth clients.

– How many dependents you have

Depending on how many ways you’re going to split up your assets, you will want different types of life insurance policies for that. It also depends on how old your dependents are – if they are risk averse and do not have a great deal of time to manage their assets, you may want to pick a life insurance policy that has an annuity. However, if you know that your children are studying the market and are very likely to want to manage their assets themselves, then you may want to put your assets in a freer financial vehicle such as a money market account or individual securities.

– Your timeframe

Even though you want to set up your term life insurance policy before you even have notions of unnatural death, you can change your life insurance policy to fit differing situations as you age. When you are young and healthy, and you are raising your kids, you can fashion your life insurance policy simply to pay out in case of an accident. However, as you get older, you will want to reduce the risk associated with your life insurance policy so that your beneficiaries can get the maximum out of payment.

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