Life Insurance Quotes

Establishing the proper value of and need for a life insurance policy

10/03/11

While many life insurance policies now offer a multitude of riders and specific benefits to cover unique expenses, the basic function of a life insurance policy remains the same, according to Business Day. When determining a policy to buy and calculating the policy's value, look first at the primary purpose for coverage.

First and foremost, a life insurance policy should cover final expenses and provide for loved ones following death. Consider the cost of a funeral, outstanding loans, mortgage and education as the primary factors in determining the value of a life insurance policy.

When considering day-to-day expenses, begin by determining the amount of time that a policy should be able to provide coverage. Some consider a policy to pay through a child's college years, others use a spouse's retirement age as a determining factor.

Once a rough amount is determined, seek out different policies and weigh the cost against the benefits to find a proper policy.

According to a 2011 LIMRA study, the average value of an individual life insurance policy decreased by $12,000 in 2010. While recent figures indicate that life insurance subscription is on the rise after a period of decline, Americans continue to maintain lower policy values.

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