| Life Insurance-necessary evil? |
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levibo
New Member
Cash: $ 1.00
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Joined: 19 Jul 2005
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| Life Insurance-necessary evil? |
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I'm about to buy life insurance in the value of one million...Stuffs not cheap, but should I shop around or just trust the New York Life agent who has spent several hours with me? I'm 46 and think I should leave my youngish family something if I die.
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Fri Feb 17, 2006 5:51 am |
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coaster
Senior Advisor
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Joined: 11 Oct 2005
Location: Wisconsin
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I don't think life insurance is inherently evil -- it's just a product some need and some don't. Unfortunately, life insurance agents have a reputation for trying to sell their product to any and all, whether they need it or not. Since your motivation is to leave something to your family if you die, then yes, life insurance is a good idea for you.
The questions are what kind of life insurance and how much. I suggest that the amount you're considering is too much. Instead, decide how many years' income you want to replace, and which financial goals you want to achieve. For example, if you want to give your family five years of your income, plus college education for your kids, just add that all up. Remember, the income is net of taxes since life insurance benefits aren't taxed.
What kind of insurance? Life insurance agents like to sell whole life because the commissions are much higher. If you're a person who doesn't need the enforced savings component of a whole life policy, I suggest you get term insurance. Yes, the premiums will go up as you get older, but compare what you'd pay to be insured as long as you plan to have insurance. Take the lower cost product if you're only looking to be insured, not to build cash value. Usually it's cheaper to buy term insurance, and if you want to save money, put the difference in some investment of your choice.
~Tim~
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Fri Feb 17, 2006 2:14 pm |
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JCook
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Joined: 24 Jan 2006
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If you do not have enough in investments and/or savings to provide for those you leave behind you do need insurance. As you get older, your investments grow, your debts are payed off and the children leave the house you should no longer need insurance.
Make sure you get enough term life insurance to provide for your family. Just do the calculations to see how much you need for them to invest it and live off of the earnings.
Do not buy whole life insurance, it is a bad investment. Term insurance is very cheap and you can invest the rest yourself.
http://www.financeforfamilies.com
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Tue Feb 21, 2006 2:55 am |
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