Life Insurance Review & FAQ

General Information about Life Insurance
Should I get Life Insurance?
How much coverage do I need?
Life Insurance Catches

General Life Insurance Information

Life insurance is paid for in monthly or annual fees called "premiums" and then paid out when the person dies. The advantage of life insurance is the children can pay for it with money you give them and then when the person dies the money paid out by the life insurance company is free estate taxes. The life insurance company makes a profit by computing your premiums based how long they expect you to live. If you live as long as they expect you to (or longer) then the amount of money the your heirs collect from the life insurance will be less than if you had invested the premiums yourself (instead of paying them to the insurance company). The only way to win (make a profit) with life insurance is to die sooner than the life insurance company expects you to die. If you get into trouble and really need the money, you can cash in your life insurance and get some or all of the money back that you paid in as premiums (depending on how long you've had the policy). For instant affordable term life insurance quotes from top life insurance companies:

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Should I get Life Insurance?

This is a question everyone has to ask. Is life insurance worth it for me? Life Insurance can save you money on estate taxes if the policy is owned by your heirs, but if you live longer than the insurance company expect you may end up getting less from the insurance than if you had invested the premium money yourself. A life insurance alternative is to set-up a bank account which pays interest into which you deposit money that you would have used to pay life insurance premiums. When you die that money will go to pay your burial expenses and to cover inheritance tax. You could just deposit a monthly amount into it instead of paying a monthly premium. If you think you would skip putting in the money some months because you did not feel like it or you would take the money out and spend it on something because you could not resist the temptation life insurance might be a good thing for you because it would take away the temptation.

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How much coverage do I need?

You should get enough coverage to where burial expenses are covered, and if most of your money is in things like your house and your land you would also want to make sure it can cover your inheritance taxes. That way your children do not have to sell your land at cheap prices to cover the inheritance taxes causing them to lose part of their inheritance to some person ripping them off by paying only a fraction of the land's true worth. Inheritance tax can be up to 50% in some areas so be sure to contact your local government to find out how much it is where you live. Most officials recommended 10X your annual income plus any financial or business obligations you may have such as mortgage payments to protect your spouse and children.

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Life Insurance Catches

There can be several catches when you sign up for a life insurance plan. You should make sure you notice if your plan has them if you did not want them to be there. One is if your life insurance is paid out no matter how you die (natural, car accident, etc) or if it is only paid out if you die an unnatural death (like in a car accident). The other is if the life insurance company can change your premiums after you reach a certain, if you get a certain illness, or interest rates go down.  If your interested you can find out what life insurance costs and we can provide you with a free quote:

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