Financial planning involves drawing up a comprehensive plan for all your life’s events. It should take into consideration protection, savings, retirement and your investment needs. A financial plan involves determining your financial goals, purposes and priorities in life. After considering your financial resources, risk profile and current lifestyle, you can draw up a financial plan that will detail a realistic approach as to how you will achieve your goals. If you struggle, as many do, with evolving a family financial plan, here are a few tips you may find helpful. The key is in identifying your goals and in sticking to your plan, even if it means exercising self-restraint in giving up an enjoyment today.
Tips on creating an effective financial plan
Identify your short term and long term financial goals.
Assess your present financial position.
Analyze your financial and relevant non-financial situation.
Evolve a financial plan. Based on your future financial goals and your current financial status, draw up a plan that would help you facilitate the achievement of your goals.
Implement your financial plan and the strategies you have adopted to achieve your life purposes.
Periodic reviewing of your financial plan should be undertaken not only to make sure you are aligning yourself to the plan, but also to make any necessary changes to reflect significant changes to your situation.
A financial plan should cover all areas of your financial needs and should result in the achievement of your goals. The scope should cover areas such as risk management and insurance techniques that would protect your goals against any unforeseen calamity. It should also cover the education needs of your children.
Your plan should be proactive enough to accommodate unexpected financial events that may have negative impact on your plan. When evolving your financial plan, make sure you don’t miss out anything, particularly a sound life insurance policy.
A sound financial plan should include life insurance
Life is uncertain. Therefore, insuring yourself against major calamities of life, particularly an inevitable one such as death, should be an important element of sound financial planning. Insurance can protect you and your family against accidents, the colossal cost of a grave illness, disability and death.
Consider what a life insurance policy can do for your family. When you die, life insurance can provide a surviving spouse, children and other dependents with enough money to sustain the standard of living that have grown accustomed to. It can also help to repay any debts that you have left behind. Death benefits can also be used to cover education fees of your children, or build a retirement fund for your spouse.
What type of life insurance is best for you?
Life insurance is a necessity if you have a spouse and family to take care of. There is no one-size-fits-all policy and therefore life insurance decisions need to be taken carefully and are dependent on your age, the number of dependents you have and your personal economic situation. One type of life insurance is not better than the other. You need to choose the type of life insurance that best suits your situation depending on your personal and financial circumstances. You can consult a life insurance advisor or use many of the online life insurance providers for advice on the best life insurance policy that would suit your personal situation.
There are two broad types of life insurance available:
Term life insurance – This is the most affordable type of life insurance. As the name indicates, term life insurance covers your life insurance needs for a specific term period such as 10, 20 or 30 years. For most people, financial needs diminish over time. Most people need life insurance coverage when they are young and starting a family. At this time, there are debts and future financial expenses such as mortgage or a child’s education. Term life insurance is designed to meet temporary life insurance needs.
Permanent life insurance – Permanent life insurance offers lifelong protection and also has a savings component attached to it. Over a long period of time, this type of life insurance will accrue cash benefits.
There are several different types of life insurance even within permanent and term life insurance. However, most people prefer term life insurance since it is the most affordable and suits their needs for coverage at crucial periods in their lives.
Best Term Life Insurance Providers
You can find the best term life insurance through online life insurance providers. They can provide you with instant term life insurance quotes and offer personal service to you. These life insurance professionals are unbiased and objective. They can answer your questions, identify important issues and make meaningful recommendations. Shopping around is the best way to check out quotes from reputed life insurance carriers. By comparing these free life insurance quotes, you’ll easily find the policy that best suits your personal needs, at the most affordable price.
Written by Denise_Mancini
Manager of public relations and marketing communications for AccuQuote.