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Life Insurance - Who Should Have Life Insurance And What Kind Of Policy?
By: Ivon T. Hughes
Life insurance doesn't benefit the person that dies; it benefits those who are
the beneficiaries. There are many types and many reasons to buy life insurance
but you need to consider the needs of your family and how long they will need
protection.
Life Insurance For The Living
The best life insurance policy is one that pays the biggest benefit. If there
are young children you should have a term life insurance policy and if both
parents work, there should be disability insurance as well. And anyone with
dependents or liabilities, should move to protect themselves at the lowest
possible cost.
Do I Pay Forever?
The reality is that the policy should benefit the surviving spouse after the
children have left home if you do not have a lot of assets.
Term Life Insurance
The two most common types of life insurance are term life insurance and whole
life insurance. Term life insurance offers coverage for a specific number of
years with a set premium. If you choose a policy to age 100, you are buying a
policy, similar to whole life but without the cost.
The biggest drawback is that you can keep on paying and have no value if you
decide to cancel. But that is what life insurance or any type of insurance is
about; risk.
You insure your car and house but you don't secretly hope to have an accident or
your home burn down. And whenever you sell either, you cancel the policy but
don't receive a refund of the premiums.
And so it is with term life insurance. It is just that; insurance against an
event that may happen prematurely. And if you decide to keep it, your purpose
has changed from protection against death to the provision of the proceeds to
your family and loved ones.
Whole Life Insurance
Term life insurance is up to five times cheaper than whole life and for that
reason, provides up to five times greater coverage. This type of policy will
provide a cash value at a later date, but remember that you have paid a fair
amount more in premium.
And this cost of term life insurance compared to other types, holds true until
the older ages. Then both types must be compared to see which offers the
greatest advantage.
Both policies offer protection but a very different cost.
When you are younger, the two best reasons to buy term life insurance are that
it is cheaper and gives you greater coverage.
When you are older, your needs have changed. If you have become wealthy, perhaps
you need to continue with the coverage to pay income taxes. If not, perhaps you
will need to keep the coverage so that your spouse can buy a life annuity to
provide just that, an income for life.
About the Author:
Ivon T. Hughes of The Hughes Trustco Group is the author of the Life Insurance
Handbook: How To Get The Best & Cheapest Life Insurance available FREE to all
new subscribers at www.hughestrustco.com.
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