This is a common financial issue that has a fairly black-and-white solution. If you have a family that relies on your income, you need insurance.
If not, you don't, no matter what the salesman says. The more complicated question is how much insurance do you need? First, add up the assets you'll leave behind. Maxing out your financial investments builds savings that could help take care of your family. Second, estimate the obligations you want to cover--the mortgage and child care, for instance. Subtract those obligations from the value of your savings to figure out how much insurance you need.
Most people are better off with a term policy, rather than whole life, which includes a (pricey) investment component. A healthy 40-year-old man can buy a $500,000, 20-year term policy for about $400 a year. Term is a beautiful thing, because most people don't need insurance once they hit 60 as most have paid off debts, college is saved for or paid for, and retirement savings should cover survivor income.
If not, you don't, no matter what the salesman says. The more complicated question is how much insurance do you need? First, add up the assets you'll leave behind. Maxing out your financial investments builds savings that could help take care of your family. Second, estimate the obligations you want to cover--the mortgage and child care, for instance. Subtract those obligations from the value of your savings to figure out how much insurance you need.
Most people are better off with a term policy, rather than whole life, which includes a (pricey) investment component. A healthy 40-year-old man can buy a $500,000, 20-year term policy for about $400 a year. Term is a beautiful thing, because most people don't need insurance once they hit 60 as most have paid off debts, college is saved for or paid for, and retirement savings should cover survivor income.
Posts
No comments:
Post a Comment