Is life insurance still meaningful to people who are financially struggling during one of the worst economies in a long time? Are you crazy to spend money on it, or are you crazy not to? Here are some things to consider.
When people are trying to tighten their belts during a financial crisis, they may have a difficult time understanding the benefit of paying for something that may not be needed — at least for awhile. You would think that this is true for something like life insurance. After all, what if your loved ones don’t need the support if you pass?
Historically, however, people have often upped their life insurance coverage during lean times as a way to preserve their families’ financial futures when things aren’t looking so rosy. In fact, a recent survey by the non-profit LIFE Foundation found that 56 percent of Americans say that the economic downturn has made it even more important to have this protection. Why is this?
The common analogy for having life insurance coverage is a parachute. If something happens to the plane, the parachute is there to protect the people who depend on that plane. During an economic downturn, the chances for something to go wrong with the financial support system of your family are even greater. Thus the greater need for that “financial parachute.”
And this provides peace of mind.
But times are still tough. One of the best things to do is educate yourself on the right insurance for your situation. You don’t want to have too much or take out an expensive policy that has a lot of bells and whistles. Determine some of the big expenses that you would want covered — debts and mortgages so your family doesn’t lose their home, day to day living expenses, etc. Subtract out other sources of income such as your retirement plan and Social Security benefits that could help in the event of your death.
Any amount is better than none, with term life insurance generally being the least expensive. If you find a term rate you like, see about getting a longer term — like 20 years — to lock in that rate. But if your budget is really tight, you may want to get a shorter, more affordable term until you can add to that later.
Shop around for the best value. Life insurance rates and underwriting rules can vary from company to company so it’s wise to compare several different quotes. Also if you already have term insurance, rates were dropping for awhile and it might be good to see if you can find something lower than when you took out your policy.
Visit an online insurance comparison site to make the quote shopping easier. You can typically get several quotes while only filling out one form.
Whether buying life insurance right now is a crazy idea or not is really a personal decision. You must decide if the loved ones who depend on your income could continue to live the life you want them to after you’re gone.
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Check it out: Buy Life Insurance During an Economic Downturn? Are You Crazy?
Life insurance helps you in many ways. It could pay for residual medical bills, funeral expenses, and credit card debts, and enable the surviving spouse to have some time to find a job or to retire comfortably.
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Posted by: Account Deleted | 10/17/2011 at 12:34 หลังเที่ยง