insurance

10 questions for your life insurance agent

How is my need determined?
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How is my need determined?

How much life insurance you'll need involves two major factors: how much it will take to pay your debts off, including the mortgage, and how much your dependents will need to maintain the same lifestyle after you're gone. Though all companies factor those two variables in, insurance providers frequently use different formulas for determining your specific insurance need, says Bradley Behrendt, a CFP with Tax & Financial Group based in Newport Beach, Calif.

"(Consumers need to ask) how did the adviser come up with the (appropriate) amount of insurance?" Behrendt says. "Was it a ballpark figure? Was it based on an analysis? If so, how deep was the analysis?"

Understanding how your need is determined is crucial, especially for families with unusual debts, such as high medical bills, that may not be considered in a rudimentary-needs formula. Once policy shoppers are sure their insurance agent is taking all of their current and future fiscal needs into consideration, they can purchase a policy that fits their family.


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