Life Insurance, Its for Those You Leave Behind
Life insurance is marketed as though it is something you will have access to during your life. The truth is, your survivors will need it to carry on after you are gone. If you are the primary bread winner or your income contributes to the survival of your family you need life insurance.
Whether there is a mortgage on your home or you rent, if others in your home do not earn enough to make that payment, you need life insurance. Do you plan on leaving your car, and the payments, to your children? You may need life insurance to pay-off that car so they can keep it. Have youngsters who may need college tuition after you pass away? You truly need life insurance. The fact is the only way you do not need life insurance is if you have prepaid all your funeral expenses and have enough money saved up to cover living expenses for those you leave behind if you should die tomorrow.
If you are single, you still need to think about the preceeding questions. Who are you going to leave your house or condo to; parents, friend, sibling – a bill or a blessing? Sobering thoughts that all adults should give careful time and examination.
Life insurance has a vocabulary just like any other industry. There are two broad categories of life insurance, term and other than term. A term life insurance policy is “pure” life insurance. Meaning that you are paying premiums for a set amount of time, the term, for a set amount of coverage. This is not an investment product and you cannot take a loan from a term policy. These two facts yeild a happy result; low monthly premiums. If you need to have an investment vehicle, compare the cost of the term insurance policy with an other than term policy of the same face value.
There are many variations of the other than term policies. The most common ones are whole life, universal life, and variable life. The basic set up is you pay for insurance plus you deposit into a savings vehicle of some sort. These types of policies often allow you to take out a loan against your policy and have a cash value in the event you cancel your policy. Each company has their own criteria on how much, when and why respectively. So let's talk numbers.
For $150,000 term policy running 20 years the premium varies between $171 and $219 per month on a 54 year old male that smokes less than a half pack per day.
Source: http://www.intelliquote.com retreived August 21, 2010