Life Insurance

This isn’t something I’d usually write about, but it’s important.

Life insurance is something everyone needs.  Most people certainly don’t need millions of dollars of coverage, but everyone needs some.

Younger people, especially if they’re supporting a family, are going to want more protection.  They might want to pay off or pay down the mortgage, provide for their kid’s education, or support a surviving spouse for a while until they’re able to provide for themselves & the family.

But the older you get, the less need there usually is for large policies, and the more you’d look for something along the lines of what some people call ‘burial insurance’.

There are two main kinds of life insurance: term & whole life.

Term insurance is a policy that’s good for a fixed number of years, often 5, 10 or 20.  Term life is usually cheaper, but goes up, sometimes dramatically, when a new term policy is written.  Many term policies also start reducing in value for older customers as well.  Most term policies end once you reach 75-80 years of age.  Term policies are the ones you hear advertised with commercials that offer ‘a 25 year old male can get $250,000 of coverage for only $20 a month’.

A whole life policy will usually last a lifetime, with no increases in premium or decreases in coverage.  That’s a great feature, but it means that a term policy, especially for younger people, will be more expensive.

A typically funeral will cost less than $10,000.  A 50 year old in good health, for example, should be able to get a $10,000 long term policy (20 years) for around $20 a month, or a whole life policy for about $30 a month.

If you’re thinking of cremation, that’s usually less than $3,000.  Our 50 year old should be able to find a whole or term life policy to provide that coverage for their family for under $10 per month.

Of course if you’ve got health issues such as diabetes, or problems with your heart, liver, lungs or kidneys to name a few, your options are more limited.  You’d probably have to look for a guaranteed issue policy.  Most of these aren’t available for anyone under about 45-50 years of age, and have a limited benefit period of about 2 years if you pass away from ‘natural causes’.  Accidental death, though, would likely be covered in full from the first day.

If you are someone who needs a large policy, you’ll probably not only have health questions, but a health exam as well.

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