Obtaining an adequate life insurance policy is a key part of every person's financial planning. While it can be an unpleasant topic, it's critical to make provisions to ensure your loved ones are taken care of in the unfortunate event of your death.

Although life insurance for seniors is especially important to obtain, it should also be a standard part of estate planning for anyone with dependents. Even people who don't have dependents may benefit from a life insurance policy, as funeral expenses can become a burden to surviving family members.

Life insurance companies exist to help lessen the financial burden faced by families when a loved one dies. Individuals purchase a policy and make monthly premium payments based on their loved ones' financial needs. In the event of the policy holder's death, the money is distributed to the designated beneficiaries.

Life insurance rates are determined by the amount of life insurance purchased. This is why it's important to secure a policy that meets your family's needs while providing a cushion for unforeseen expenses.

There are a couple of ways to estimate what size life insurance policy you need. One very simple method is to multiply your annual income by a factor of ten, and then add an additional $100,000 for each dependent who may have college tuition expenses. This is a simple formula that works best when creating a ballpark estimate of your financial needs.

Another method is more complicated but can provide you with a more accurate answer. Your first step is to calculate your financial obligations. This includes mortgage balances, other debts, potential future needs (college tuition, funeral expenses, etc.), and childcare expenses.

Next, take your annual salary and estimate how many years of income you'd like to replace. After you add these two totals together, subtract for any existing savings that would be readily available to your dependents. The remaining amount represents the level of life insurance policy you should obtain.

The beneficiary of a life insurance policy is the person (or entity) that will be on the receiving end of the payout in the event of your death. Common beneficiaries include a spouse, children, and other important family members such as nieces, nephews, or siblings. You may list multiple beneficiaries and designate a percentage of the payment to each one.

The designated beneficiary can even be an estate or charity of your choosing. Some people choose to do this as a way to make a final donation to a charity or cause they found important throughout their lifetime.

It's extremely important to designate a beneficiary. Without a person (or entity) named, the funds will go to your estate, and the process for determining who is legally part of your estate can be a lengthy one. Not having a designated beneficiary can result in your money being tied up for a long time while your loved ones navigate funeral expenses and ongoing bill payments on their own.

If you find yourself overwhelmed by information and options, rest assured that you don't have to navigate this process alone. While there is an abundance of life insurance companies out there, Moff and Associates has been in business for over 35 years and has a team of trusted professionals ready to guide you on the best options for your family's needs.

Contact us today to obtain affordable life insurance quotes and learn more about the best policy for you.