Buying Life Insurance - What Kind and How Much?
Finding the middle ground between being “insurance poor” and unprotected requires assessing real needs and choosing products that are affordable. This article introduces different types of insurance products and the role that they can play in a personal financial plan.
Buying Life Insurance
Conventional wisdom says that life insurance is sold, not purchased. In other words, some people are reluctant to discuss the importance of owning life insurance, and others are simply unaware of the need to have life insurance. Although many large companies provide life insurance as part of their benefits package, this coverage may be insufficient.
Who needs life insurance? If there are individuals who depend on you for financial support, or if you work at home providing your family with such services as child care, cooking, and cleaning, you need life insurance. Older couples also may need life insurance to protect a surviving spouse against the possibility of the couple’s retirement savings being depleted by unexpected medical expenses. And individuals with substantial assets may need life insurance to help reduce the effects of estate taxes or to transfer wealth to future generations.
Types of Insurance Read more
Just the Facts on Life Insurance
When buying insurance, you can be overwhelmed by an information avalanche. To protect your future from poor choices today, organize your insurance search by employing a few simple questions: Who? What? Where? When? Why? and How much?
Who?
The classic argument to avoid life insurance runs, “If I die, why do I need money?” You don’t — but your family, your business or your favorite charity might. So anyone with dependents, human or otherwise, might need life insurance.
Of course, if you don’t need to protect anyone else, insurance is not a wise way to spend money.
According to Steve Kramer, who has served on the members’ insurance and benefits committee of the California Society of CPAs for 27 years, this group includes people who have raised and educated children now living independently, folks who have accumulated sufficient assets to support a surviving spouse, and the single elderly (and not-so-elderly) population.
What?
People approach life insurance with predisposed notions, says Rory Roniger, CLU, ChFC, head of the financial services arm of the Eustice Insurance Group in Metairie, La. Read more