Let's say tomorrow your house were to burn down. How badly would that affect you? If you have millions of dollars sitting in a savings account, it'd be no big deal. You've basically self-insured against this kind of catastrophe. If everything you own is in that house, it'd probably hurt quite a bit. Since the loss of your house would be devastating, it's a good idea to buy homeowner's insurance to make sure that should the worst ever happen, you won't be living on the street. Where can i buy life insurance.
When it comes to life insurance, you're basically asking the same questions except relating to your own death. What would happen if I died? What measures do I want to take to make sure those things don't happen? In my own case, I'm a 29-year-old guy. The only people I care about financially are my girlfriend and my parents. All three of them make more money than I do. The only financial consequences my death would cause them is the price of my funeral, and the life insurance policy I have through my job is more than enough to cover that. There is no reason for me to get life insurance. They will be emotionally hurt a great deal by my death, but it will not leave any of them destitute and desperate.
What is your situation? To what degree are people you care about dependent on the resources you provide in order to survive? What would happen to your wife and kids if you died? Would life go on more or less as usual? Or would they be destitute? Are there things you want to make sure happen, like sending your kids to college? Will they still be able to do those things if you die, or are those plans impossible when you're not in the picture?
Only you can answer those questions. It's your call. You're buying peace of mind and safety for your family, just as you are with any other kind of insurance. Whether you think that's a waste of money or absolutely vital depends on your own perception of risk and how devastating your death would be. Advising you beyond the information I've given you would be inappropriate over this medium, especially since I'm no longer a financial adviser, and since you haven't given me nearly enough information to give a real recommendation. I hope this has helped you see the whole picture though.
Good luck in your decision.
Life insurance is the core of every financial plan. But, still, people are unable to comprehend it easily because of its complexity. With proper information and a little bit of research, you can simplify the buying process and arrive at the right choice for you and your family.
You can easily compare all the available policies in market from all top insurance companies in few seconds to choose the best policy as per your needs from here- Term
Here are few facts about life insurance that can help you to make a right decision:-
Types of Life Insurance Policies
Term insurance: It is the simplest, least expensive and most widely applicable type of life insurance. It is a pure plain vanilla protection cover without an element of investment. It offers financial protection for a specific tenure. In the case of death of the policyholder, his nominee will get the sum insured to lead a financially secured life. However, if you survive the policy tenure, you have to forgo the entire premium.
Endowment insurance plan: It offers dual benefit of life cover along with saving component. It usually gives returns much like debt instruments. A certain part of the premium is allocated towards sum insured and rest is invested. It gives a lump sum amount after the policy tenure or on the death of the policyholder, whichever is earlier.
Moneyback insurance plan: It offers periodic payouts to help you meet financial goals at regular intervals. In the case of the death of the policyholder, the insurance company pays the full sum assured along with survival benefits.
ULIP: Unit Linked Insurance Plan (ULIP) offers life cover with an investment component. However, it offers investment options much like mutual funds. Since it is linked to the market, a return is not fixed. ULIPs also give flexibility of switching between equity and debt funds. It helps to create wealth in long term.
Whole-life insurance plan: These plans offer life cover for the whole life of the policyholder or up to 100 years, whichever is earlier. It also offers dual benefit of insurance and investment. It has investment component much like bonds or CDs but backed by the insurance company.
Auto insurance rates
Decide how long you want the policy to cover you
After deciding type of life insurance plan that you want to purchase, next step should be to decide the term of the policy. The term of your policy should be until the age you are planning to retire.
Decide the amount you need to be covered for
You should decide the amount you need to be covered for. If your cover is insufficient to meet your present liabilities, your dependents will have a hard time to make their ends meet in case of your death. And if you take very high life cover, you will end up paying very high premiums which are a waste of money.
Generally, your life insurance cover should be ten times of your annual income plus outstanding loans such as a home loan or car loan plus major future financial expenses such as your children's education and marriage plus inflation.
You can further enhance your cover by attaching rider or add-on cover with your life insurance policy. It offers financial protection over and above the basic sum insured against an eventuality. These riders can be bought for a nominal premium. Some of the popular riders are critical illness rider, disability rider, and premium waiver rider.
Get life insurance quotes
Getting life insurance quotes is very important as different insurers have different premiums for a specific amount insured for a certain period with certain exclusions for a certain age. If you choose to avail of insurance riders than the life insurance quotes will increase and this increase will not be uniform amongst various insurers. Asking for life insurance quotes can save you a lot of money over the policy term.
Study various life insurance quotes
After getting various insurance quotes, go through them minutely. Understand what every policy covers as well as its exclusions. Then shortlist few policies that fulfill your requirements, then, find out about the customer service of the shortlisted insurance companies.
It is always advisable that you go for less complicated life insurance policy so that you can comprehend it easily. Before buying any life insurance policy go through its terms and conditions thoroughly.
Read more details here- PolicyMantra's Guide to Life Insurance
This is what my insurance agent told me when I asked her the same question: "You don't buy life insurance for yourself, your buying life insurance for those that you love." Based on what you told us about yourself, you seem to be a fit adult, but that does not mean we are invincible or immortal...sucks, I know.
Life insurance is not "throwing away money" as you fear it may be, it's basically like putting away money in a jar, but that jar doubling it day after day. I personally know many people who only make around $40,000 annually but have a life insurance policy for $500,000. Why? Because they know that WHEN, not if, the day comes that their time is up, the last thing they want is their loved ones to be stressed about funeral expenses, lost wages, the mortgage, car loans, etc. Your securing your families future when you purchase life insurance, your paying for your children's college (not sure of your relationship with your step children, going to assume you see them as your own blood-kin and care about them).
Now this is where it gets a little 51. Yes, you are fit, you run marathons which I bet at least 10% of the readers of this post who are 30 or younger can't even do. But in the eyes of insurance, you are a risk because of your age. The typical male lives to about 70 years of age, and doing the math, assuming you fall in the high risk pool and a $500,000 10 year term policy costs you $250 a comes out to $57,000 in 19 years. All what the insurance company sees is a loss of $443,000. So check with your local agent and go over what plans may benefit you. I personally would recommend Term life insurance. You can lock in your rate for 10, 20, or 30 years and no matter how many years you are into the policy, your estate is guaranteed the value of the policy.
Again, I recommend you check with your local agent who hopefully has gotten to know you and established a professional relationship with you. They will help you make the best choice for you and your family. Thanks for reading.
An agent could really help you with this. However, you are 51, and have dependents, so yeah, you should have SOME life insurance. Just because you are health doesn’t mean you are not going to die. You could have an accident. Your ex-wife could shoot you. Do you remember Jim Fixx? He started the whole running craze in the 70s and early 80s. He dropped dead at 52 after a nice workout. At a minimum you should have enough coverage to pay for your last expenses (funeral and such), medical expenses in case you linger a bit, and to pay off your mortgage and other debts. If your spouse doesn’t work, you need to do even more extensive planning to make sure she is taken care of in case you die.
Insurance is not “throwing your money away”. It provides a hedge against financial disaster. That is what it is for. I’m not an expert on life insurance, but you may want to look at a couple of different types of policies. One policy, a term policy, which has fairly high limits with low premiums. It is usually a fixed premium amount for a limited period of time (say 10–15 years). This is good if you still have a mortgage or other debts that you expect will be paid off within the term or children who are younger that should be on their own within that time. They usually pay more for accidental death and sometimes have riders for things like dismemberment (losing a limb, eye, etc.). That is what I have at this point as my kids are only now entering age of adulthood and I still have a mortgage.
The other type of policy you can get (and you might want both as I indicated) is a whole life policy. It is life insurance policy that also acts as a type of investment vehicle that earns a return and you can draw on it in retirement after it has “matured” (paid off).
I would encourage you and your wife to speak with an independent insurance agent about life insurance. If you have a regular agent you could speak with them first. But if they are a captive agent (representing only one company, like State Farm or Allstate), I find that independent agents work better for life insurance (they represent more companies) as the rate and underwriting factors get more complicated after age 40. You can go online, but being older you will be better served by an agent who can navigate the complicated underwriting and medical requirements with you.
Additionally, you want to evaluate yourselves from an estate planning standpoint. You need to make sure your property can be transferred to your wife easily (and vis-versa) and if you have a prior marriage that your ex-wife is not entitled to any of your state (and your wife’s ex doesn’t get any of hers unless she so desires). You also want to work out things like what your step children get so there are no issues when one of you dies. Step families and exes are complicating factor. If your wife dies, and say, she got the house in her divorce, were the kids supposed to get the equity after she died? She might have rolled into the house you bought together. I bet you didn’t look at the divorce agreement. You wouldn’t believe the stuff that comes out when someone dies. In addition to life insurance, you want this stuff worked out now. You do not want to kicked out of the house after she dies because your step children want to sell it for the cash.
of course!! Not only you, I suggest everyone should have min 1 or 2 and max (upto you) Insurance product. Insurance is something which hedge your Risk. To protect yourself and your family you should have it.
but somethings you have to keep in mind which insurance is suitable for you and its expiry date, corpus amount, risk coverage etc.
You must select the right amount of Life Cover in order to make sure that it is sufficient to take care of your family’s well-being. A good thumb rule is to choose a Life Cover which is at least 10 times your annual income. For example, if your annual income is `15 lakh then your Life Cover should be at least `1.5 crore. Similarly, if your annual income is `2 lakh per year, then your Life Cover should be at least `20 lakh.
Life Insurance is also a good way to systematically save and build wealth for the future. It is an ideal long-term savings tool that can help you meet your financial needs after retirement or even fulfil a future goal like your child’s marriage. Thus, with life insurance, you get double benefits of Protection as well as Savings.
Not only this you actually get tax exemption in this under 80c.
Need for term life insurance
The amount you make and how active you are (marathon props!) have little to do with whether or not you should by life insurance. And really, little does your age.
How much your wife and kids are, and would be, dependent upon your income.
How much you care about their lot in life if you die prematurely.
If that sounds harsh, it is not intended to be. It’s simply gets to the heart of the matter.
From the information you provide in the question details, it sounds like you think that life insurance is a waste of money because you are in good physical condition.
The #4 cause of death is by poisoning. (yep, poisoning)
The #13 cause of death is road accidents.
If you are as healthy as the question suggests, the cost of $250,000 of 15 year term life insurance could cost under $40 per month. $500,000 would go for about $70 monthly.
Only you know the answer to questions #1 and #2 above.
Consider those two questions and the quotes provided above. You can weigh your priorities against the cost and make a decision that best suits the financial priorities of you and your family.