One of the most important decisions that have to be made by consumers buying life insurance is determining the policy limit. Consumers in Katy as well as the rest of the state and country often have no idea what the policy limit should be. In general, the policy limit should be an amount of money that is high enough for the survivors to meet financial obligations for a couple of years. Many financial advisers suggest that the policy limit should be five years worth of expenses although this is not a hard and fast rule. It can be helpful for consumers shopping for Life Insurance in Katy TX to understand how to decide the policy limit.
First of all, it is important to know that the underwriting will be stricter as the policy limit requested goes up. All life insurance policies are medically underwritten. Most of them require taking a medical exam in order to gain approval. For example, life insurance policies of less than or equal to $100,000 often do not involve anything more than a blood test and a blood pressure reading. As policy limit go up, the requirement for passing medical underwriting becomes stricter. For example, it may be necessary to pass an EKG exam in order to get coverage for those requesting higher limits. Keep in mind that age can cause an insurer to require additional medical exams as well. An elderly person may need additional medical exams regardless of the policy limit.
It is also important for consumers to consider their annual expenses when figuring out the appropriate policy limit on Life Insurance in Katy TX. If expenses are higher, a higher policy limit will be included. Don’t factor calamities that are covered by other policies such as Homeowner insurance. Those who have dependents that are close to college age may want to factor in higher education expenses as well. Keep in mind that life insurance proceeds are usually tax-free as long as the consumer paid the premiums. If the life insurance premiums were paid by another party such as an employer, the proceeds from the policy would be taxable. Visit ASAP Insurance for more information
There is no single right answer when determining the right amount of Life Insurance in Katy TX. However, it is important to not guess at the policy limit. Consumers need to make an informed decision to make sure that their families are covered financially in case of untimely death.
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