Life Insurance Quandary
Which Life Insurance Needs Apply
Life insurance quandary! We all know that at some point in our lives the
prudent thing to do is to buy some life insurance. Some people have
definite ideas as to the type and amount necessary to fulfill their
Others find themselves in a decision making dilemma. These people
don't know how much to buy or what type. This is sometimes referred to
as a kind of life insurance quandary.
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You may say the easiest way to go is to ask a life insurance agent. If
you know a reputable one that sells for a highly rated company then go
for it. If you don't then here are some guidelines that you may find
- Single Persons Insurance Needs
If you are single then the amount of life insurance
needed is whatever it will cost to pay off your last expenses including
funeral costs. I refer to things like paying off outstanding debt that
may leave a loved one holding the bag. Attorneys fees and estate taxes
should also be included.
- Needs Of A Married Person With Children
A married persons needs are a different matter, especially if
there are children involved. Both parents work, more often than not, in
today's world. Both help with the maintenance of the household. If
either parent dies serious financial problems could come into play.
Regardless of whether or not the income is coming in the bills have to
be met. The rent or mortgage has to be paid, the survivors have to eat
and they also have to wear clothes. They will continue needing a car as
well as sufficient funds to pay utility bills.
Every child today is involved in something. It could be some kind
of sport or other extra curricular activities. All these things cost
What you need to think about is that the cost of living, for a
particular household, is not going to change very much because one of
the breadwinners is no longer there...unless that person is very
extravagant. If it costs $50,000 to live now, for example it will cost
close to that amount after a spouse dies. We should therefore purchase
sufficient life insurance to assure the continuation of that persons
income after death.
Now, what type of life insurance should we buy. People find this
decision quite disturbing. This can be considered a life insurance
quandary. Term life insurance
is a favored choice but there are many term plans to choose from. Here
is what you do. Decide how long a period you will need the policy for
and buy a level term policy that will fit that time period.
Your youngest child is age 12. S/he is expected to graduate by
age 18 but you also have to figure in 4 years of college. You therefore
need to buy a policy that would provide sufficient income until this
child is age 22. You also should add an amount which would cover the
college costs for all the children if you died. The same consideration
goes for your spouse. A 10 year or 15 year term policy would take care
of this situation.
You may also want to consider providing the life insurance coverage
for a longer period of time so that tour spouse is also taken care of.
In this case you may want to purchase a 30 year term policy. You can
convert it to a permanent plan
within a specific period of years, depending on the company you are
dealing. On the other hand, you may choose to buy a permanent policy
like whole life, universal life, variable universal life or variable
life policy which will give you the coverage from the outset and
continue for a longer period.
I hope this helped answer some of your questions.
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