Is life insurance right for you?
You think about a lot of things as the year comes to an end. In fact, I was thinking about my need for life insurance.
Normally when the premium renewal comes, I just pay it. But this time, I asked myself: Do I really need it?
I don't have a mortgage or any other outstanding debt. No kids, so no college costs.
And I have a small life insurance policy from Fisher Communications, so I feel comfortable that if something were to suddenly happen to me, my wife would be fine.
So I decided I would cancel the policy. But first, I spoke to my friend, Greg McBride, senior financial analyst at Bankrate.com.
McBride said in my case, it was a smart decision.
"Life insurance is often thought of as income replacement, that is money that is going to protect your significant other or your children in the event that you pass away suddenly. But, you have to reevaluate your needs for coverage and your need for the same level of coverage as life circumstances change.
"For example, maybe your children are grown or perhaps there's no longer a big disparity of income between you and your significant other, finally another thing as you get close to retirement, you've accumulated a lot of assets -- assets that may be sufficient to sustain the same lifestyle in the event that may be sufficient to sustain the same lifestyle in the event that you were to pass away suddenly," he said.
McBride pointed out that in my case, the biggest risk is long-term care, so I should consider taking the money I paid for life insurance and put that towards a long-term care policy, which i plan to do.
By the way, you'll find life insurance calculators on Bankrate.com that can help you decide if you need coverage and if so, how much you might want.
Just to be clear, I'm not saying life insurance isn't important. I'm saying it's something you shouldn't automatically buy without considering if you really need it. You may want to have it just to leave a bundle of money to your heirs. Or, as in my case, you might want to use those premium dollars for something else.
And if you buy life insurance, the cheapest way to go is to get term insurance. You buy it for a fixed number of years and you get a fixed premium, so there no surprises.
As for life insurance policies for kids, they don't make any sense. As McBride said, life insurance is income replacement.
Normally when the premium renewal comes, I just pay it. But this time, I asked myself: Do I really need it?
I don't have a mortgage or any other outstanding debt. No kids, so no college costs.
And I have a small life insurance policy from Fisher Communications, so I feel comfortable that if something were to suddenly happen to me, my wife would be fine.
So I decided I would cancel the policy. But first, I spoke to my friend, Greg McBride, senior financial analyst at Bankrate.com.
McBride said in my case, it was a smart decision.
"Life insurance is often thought of as income replacement, that is money that is going to protect your significant other or your children in the event that you pass away suddenly. But, you have to reevaluate your needs for coverage and your need for the same level of coverage as life circumstances change.
"For example, maybe your children are grown or perhaps there's no longer a big disparity of income between you and your significant other, finally another thing as you get close to retirement, you've accumulated a lot of assets -- assets that may be sufficient to sustain the same lifestyle in the event that may be sufficient to sustain the same lifestyle in the event that you were to pass away suddenly," he said.
McBride pointed out that in my case, the biggest risk is long-term care, so I should consider taking the money I paid for life insurance and put that towards a long-term care policy, which i plan to do.
By the way, you'll find life insurance calculators on Bankrate.com that can help you decide if you need coverage and if so, how much you might want.
Just to be clear, I'm not saying life insurance isn't important. I'm saying it's something you shouldn't automatically buy without considering if you really need it. You may want to have it just to leave a bundle of money to your heirs. Or, as in my case, you might want to use those premium dollars for something else.
And if you buy life insurance, the cheapest way to go is to get term insurance. You buy it for a fixed number of years and you get a fixed premium, so there no surprises.
As for life insurance policies for kids, they don't make any sense. As McBride said, life insurance is income replacement.