Life insurance provides your beneficiary with money upon your death, to help with your final expenses, to pay commitments you left behind and for their own use. Although death benefit is the main reason most people buy insurance, some life insurance policies can benefit you, the insured, while you are still living.
Here are some of the reasons you need life insurance:
- Pay your last expenses, which may include estate taxes and burial costs
- Protect your family's home by giving them money to pay off the mortgage and other debts
- Maintain your family's standard of living by replacing your income
- Pay child care expenses including paying college fees
- Provide supplemental retirement income for your spouse or partner
If your spouse contributes to your family's annual income, then you should have adequate life insurance on your spouse to ensure that their income is replaced in the event of his or her death. If your partner does not contrinbute financially, it is still a good idea to have insurance because you may need to replace a valuable service once performed by your partner. eg. home care and providing child care.
There's no single correct answer to tell you how much you need. Typically, however, it can range anywhere from 2 to 10 times your annual gross salary but because people's circumstances differ from person to person, it is best to consult an insurance career agent to assist with determining how much is appropriate for you.
Life underwriting takes several factors into consideration such as: your height, weight, current health, medical history, family history, occupation, hobbies, driving record, and whether you have ever smoked or piloted a plane. These factors are evaluated at the time you apply to determine if you are a candidate for insurance and the price you should pay in exchange for the level of risk you are to the company. IF you are in good health, your insurance rates are likely to be lower than those of a person with health issues.
Although you have access to life insurance through a group such as your place of employment, there are several questions to consider when determining if and how much individual coverage you should purchase.
- How long will your job last and will you still have your group life insurance coverage if you leave your job?
- Can you convert your group life to an individual policy if you leave or are terminated? The cost to do this is usually very high to an individual.
- Do you have enough coverage from your group life insurance?
- What is your present and likely future state of health? If you are in good health, then that's the best time to buy individual insurance.
Here are two good reasons to consider purchasing life insurance on, or better yet, for your child:
- Premiums on the life of a child are the lowest possible. If your child were to purchase the same amount of coverage as an adult, the annual cost would be much higher.
- Although children are usually much healthier than adults, they may become ill as an adult and may not be able to purchase life insurance. Buying insurance for your child ensures that they will have life coverage, providing the policy remains in force.
Depending on the plan you choose, your Health Insurance may or may not cover medical services and emergencies while traveling outside the Bahamas. The BAF MedSafe Plans offer worldwide coverage. The Flexicare plan only covers medical services within the Bahamas. Your BAF Agent will help you decide on the plan that best suits your needs.
Even though you have health insurance through your job, there are many questions you should ask yourself when considering individual health insurance.
- How long will you be in your current job and can you take your health insurance with you when you leave?
- Do you currently have adequate coverage?
- How will you pay for health-related expenses that are not covered under your company's policy?
An individual health insurance policy can supplement your company-paid policy.
An Annuity is a Contract between you and an insurance company, which states that in exchange for your payment (premium) the company agrees to pay you an income in the future.
Whether you choose to make a lump-sum payment with a Single Premium Annuity or periodic payments with a Flexible Premium Annuity, your Annuity will have an accummulation phase, during which time your investment grows, followed by an income phase, when you withdraw your money in amounts and at intervals determined by the plan your purchased. There is an option to invest in an immediate annuity in which you deposit a substantial amount of money and begin withdrawing immediately. In this instance, there is no accummulation phase but your money contiues to grow even after you begin withdrawing funds.
Pensions plans can be Corproate-sponsored or personal. In a Corporate Pension Plan, your employer makes contributions toward a pool of funds set aside for your future benefit. The funds are managed by a company such as BAF and invested on your behalf,so that you can receive benefits when you retire.
A pension plan is a great way to secure your future. Personal pension plans put you in control of your own retirement and are always a good idea, even if you have a corporate-sponsored pension plan. Oftentimes, you may need to supplement your employer's plan with your own to ensure that you can live comfortably when you retire.
There are two main types of pension plans: defined-benefit plans and defined-contribution plans.
In a defined-benefit plan, your employer guarantees the amount you will receive when you retire, regardless of the performance of the underlying investment pool.
In a defined-contribution plan your employer makes predefined contributions for you and your final benefit will depend on the performance of your investment fund.
Many people rush out to find the home of their dreams only to find that they are unable to obtain the necessary mortgage to make that dream come true. Your very first step to purchasing a home is meeting with your mortgage specialist who will pre-qualify you to help you determine how much you can afford and the likelihood of you obtaining a mortgage. Our mortgage specialists are financial planning experts and can work with you to prepare for home ownership.