What Life Insurance Policy Should You Buy?
Reader’s Question:
I’m planning to purchase life insurance but I have so many questions about it. First, do I really need life insurance? Also, how much life insurance do I really need and what kind of insurance policy should I get?
Vicky
Little Rock, AR
My answer to your first question would be yes. Take this situation as an example, if you were to die unexpectedly who would suffer most? If you have a husband and children, most likely they would be the most affected parties. How would your spouse handle that situation? Keeping a job is hard, doing your responsibilities while keeping a job is even more challenging. Imagine your husband taking on all of your responsibilities and trying to support the family with no funds to be able to hire help. Without life insurance, that’s the most likely situation that would occur.
For your second question, this depends on your family’s needs. Think about their needs for a given period of time. For example you could buy life insurance so your spouse doesn’t have to work as long as the children are at home. You could also opt to buy a life insurance policy that would cover your childrens’ college educations. If you opt to purchase an insurance policy that would allow your spouse to stay at home and even have the luxury to live high on the hog, then that means that you’ve probably gone overboard with too large of an insurance policy.
Lastly, for your third question, the type of insurance policy that you need to buy depends on you. Let me just give you some basic information about it so that you can decide. In general, there are two types of life insurance – whole life and term life. Whole life will cover you – your whole life time. It offers an investment component. However, for most families with limited budgets this may not be the perfect insurance policy for them.
Term insurance on the other hand allows you to pay for premiums for a specified period of time. If let’s say you die during the term of your insurance policy then your beneficiaries will get the death benefits. However, if you survive the term, there are no benefits or cash value and you and your beneficiaries will not get anything.
Armed with this information, you are equipped to make the most wise decision that would provide adequately for your family in your absence while giving you the peace of mind that they will be well taken care of should you pass away. I hope this helps you to make the best decision!
Category: Reader Questions
