Do you ever wonder if you need life insurance? And then, beyond that, how much should the policy be for? $100,000? $250,000? $500,000? $1,000,000??? It seems like every source has different information. Life insurance really doesn’t have to be complex. It’s actually very simple. Answer these questions, and you’ll know within minutes whether you should have life insurance or not.
- Do you have any dependants?
- Would your long term savings run out for your family in less than 10 years if you died? (if you have no dependants, the answer to this question is “no”)
It really is as simple as that. If you answered yes to both questions, then you should have life insurance.
I currently have a life insurance policy on myself because my wife is somewhat of a dependant. Sure, she works a full-time job, but the loss of both my income and the services I offer around the house could really make things difficult for her.
We currently do not have a policy for my wife, though. If she passed, things could be tough, but our current expenses would easily be covered by my current income. Plus, our current savings would cover any initial funural costs.
Life Insurance For Children?
Some insurance agents insist that you should purchase a policy for your children. I would strongly advise against that. First of all, it is extremely rare for a child to die, and secondly, they contribute no financial help to the family, so if they pass the only expense you’ll incur will be the funeral costs.
I know it’s a little morbid to talk about death, but life insurance is a necessary expense if you truly love your family and want what’s best for them. If you do not have a life insurance policy on yourself, then they will most likely have a very difficult life. Nobody wants that, do you? I suggest you take a look at some policies today.
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.