Hey there again. Today I wanted to talk about how people are often surprised that I recommend that they buy term life insurance. I think the reason that they are surprised is because with most issues and ideas today, there are always two sides. You are either on one side or on the other. I really don’t think that you should look at any decision with such polarity when the middle of the road makes more since.
In my case, even though I’ve enrolled thousands of people into whole life insurance policies, (and also own one myself) I also own a huge 20 year level term policy. Why? Well, if the worst happens today, my family needs a lot of money. Term insurance is the best way to provide that money in case the worst happens NOW. The thing is though, that they worst probably won’t happen and my term policy will probably never pay. In which case, I still need to pay for my burial and final expenses once it has. While I can buy burial insurance to go to the funeral home, I prefer it go direct to my beneficiary.
While I bought my policy from a friend of mine, I suggest most people just buy term life insurance online. Pick a good company and then pick the largest face amount you can afford. I think over a million is probably appropriate especially if you are younger. The fact is it takes alot of money to do anything these days. My health insurance alone is as much as my house payment. And I wouldn’t go under $200,000. It’s just to cheap if you are healthy.
You can also buy term life insurance through your employer but in most cases it goes up in price every five years and is way more expensive when you get close to retirement. You are better off getting your own policy with a locked in rate for a longer period of time. I have seen some companies over level term through their employer but not often. The thing you have to remember is that you do not own or control group term insurance. One company we work with is in danger of losing their group life contract and another one actually just opted to cancel their own. If you would happen to work for an employer that does that your insurance disappears.
Buying term life insurance is particularly important to pay off your debts but as I see it, it is more important to use it as income replacement should you die too soon. Most people only see it as a way to pay off your debts when you die and only buy that much term. I think that is a mistake. I think that you should buy way more than that to replace the income a person would have made had they lived. A lot of people I talk to, don’t want to make anyone rich when they die which is fine and therefore, don’t insure their income. This kind of thinking is really what makes families always struggle, because they want each generation start from scratch. I guarantee you that wealthy people don’t think that way. Insure as much income as you can afford to replace.
It’s not really difficult to learn how to buy term life insurance. Check online for quotes, call your insurance agent and check out the insurance companies rating. Make sure that it is rated excellent by AM Best. Why buy term life insurance? Because it’s cheap if you are healthy and the if the worst happens, your family will need it. And buy some whole life as a base amount of insurance for when it expires unused.
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