Life Insurance - Who Should Have Life Insurance And What Kind Of Policy?
By Ivon T. Hughes
Life doesn't benefit the person that dies; it benefits those who are the beneficiaries. There are many types and many reasons to buy life but you need to consider the needs of your family and how long they will need protection.

Life For The Living
The best life policy is one that pays the biggest benefit. If there are young children you should have a term life policy and if both parents work, there should be disability as well. And anyone with dependents or liabilities, should move to protect themselves at the lowest possible cost.

Do I Pay Forever?
The reality is that the policy should benefit the surviving spouse after the children have left home if you do not have a lot of assets.

Term Life Insurance
The two most common types of life are term life and whole life insurance. Term life offers coverage for a specific number of years with a set premium. If you choose a policy to age 100, you are buying a policy, similar to whole life but without the cost.

The biggest drawback is that you can keep on paying and have no value if you decide to cancel. But that is what life or any type of is about; risk.

You insure your car and house but you don't secretly hope to have an accident

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or your home burn down. And whenever you sell either, you cancel the policy but don't receive a refund of the premiums.

And so it is with term life insurance. It is just that; against an event that may happen prematurely. And if you decide to keep it, your purpose has changed from protection against death to the provision of the proceeds to your family and loved ones.

Whole Life Insurance
Term life is up to five times cheaper than whole life and for that reason, provides up to five times greater coverage. This type of policy will provide a cash value at a later date, but remember that you have paid a fair amount more in premium.

And this cost of term life compared to other types, holds true until the older ages. Then both types must be compared to see which offers the greatest advantage.

Both policies offer protection but a very different cost.

When you are younger, the two best reasons to buy term life are that it is cheaper and gives you greater coverage.

When you are older, your needs have changed. If you have become wealthy, perhaps you need to continue with the coverage to pay income taxes. If not, perhaps you will need to keep the coverage so that your spouse can buy a life annuity to provide just that, an income for life.
Ivon T. Hughes of The Hughes Trustco Group is the author of the Life Insurance Handbook: How To Get The Best & Cheapest Life Insurance available FREE to all new subscribers at www.hughestrustco.com

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