DO I NEED LIFE INSURANCE?
While this Title phrase may sound dramatic, it simply sums up the very purpose of Life Insurance, and what it will do for your family. Life Insurance does not replace your goal of building your financial security through investments, but it should be viewed as a starting point in that effort. Your family’s Financial Future will be seriously impeded, if not destroyed, if one of the adult members of the household were to die unexpectedly.
Once you agree with the importance of this protection, you then have to decide how much is appropriate, and just as important, affordable. In today’s world the ideal is having a policy large enough to conservatively replace the major breadwinner’s financial contribution to the family. (And, let’s not forget about a non working spouse’s financial contribution to the household which has been conservatively estimated at @$35,000 per year.) The amount of mortgage debt, and the cost of the children(s) college education are other items considered vital to the amount of coverage.
Among the two types of Life Insurance available (temporary or permanent) the least expensive is Term (temporary) coverage. When your children are minors (up to age 18) and/or the mortgage debt is large (for new homeowners), Term is an economical tool to provide the larger protection you need during these years. However, 98% of Term is not in force when it’s needed, as most live through the term, allow it to lapse, or cancel it when times are tight. Term is also not as available in your later years as the cheaper premiums do not offset the mortality risk to the insurance companies. Then you will need to consider a permanent policy (Whole Life, Universal or Variable Universal). If possible you want to buy this as young, and inexpensive as possible.
Something is better than nothing! You should consider what the family can afford, on a monthly basis, and work from there.
Virginia Trowbridge
650-208-7715
http://www.trowbridgeins.com/
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