Risk Management and Insurance Planning
With life insurance planning, the first
question is always, "How much is enough?" Whether you need life insurance
at all and, if you do, the best amount of insurance coverage needed depends
on your particular circumstances. Many people start thinking about life
insurance when they marry and have children. But, even if you aren't
married, you may have someone else, such as a parent or sibling, who depends
on you for financial support. The longer your dependents need support the
greater your need for coverage.
Our life
insurance calculator will help you figure out how much additional coverage
you need, if any. If you discover you need additional coverage and you
are still relatively young, term life insurance is generally the least
expensive way to go because it provides "pure coverage"; you build no cash
value in the policy. (Note that the cost of term insurance goes up as you
grow older.) Term insurance provides protection for a specific number of
years, with the death benefit paid to your beneficiaries if you die during
the policy's term. When the term ends, so does your coverage, unless you
renew the policy.
On the other hand, whole
life policies and investment-linked life insurance provide protection over your entire life. For younger
people, whole life insurance is more expensive than term. But the premiums
generally are fixed, so as the years go by, it can become less expensive.
Cash values and interest accumulate in these policies are tax-deferred,
and you can borrow from the cash value.
Disability Protection and Personal
Accident Insurance
Like life insurance planning, disability
insurance planning is based on your particular needs, circumstances, and
resources. In addition, you may want to include long-term care insurance
in your financial plan to help preserve your assets for your family in
the event you suffer a prolonged illness. Don't forget about personal
accident (PA) insurance too.
Health Insurance and Medical Card
Also consider healthcare provisions
for medical treatment. A medical card can
help protect you against the costly medical expenses and ensures comprehensive
coverage in medical, surgical and hospital costs, ambulance fees and other
related medical charges.
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