Should You Have Life Insurance?

Should You Have Life Insurance?

by

Randell Rad

Life insurance policies aren\’t something a lot of people think about early in life. Many people think about opening a life insurance policy after the death of someone close to them or after the birth of a child. No matter what stage of life you are in, now is the time to understand what your life insurance policy needs are and to make sure you have the policy that\’s right for you and your family.

Whether or not you provide financially for other members of your family, your life insurance policy should, at a minimum, provide enough money to cover the expenses of your funeral. Many people don\’t realize the cash required at death; having a life insurance policy to cover the cost of your burial and funeral will take a large burden off your loved ones. Life insurance policies with enough value to cover these death costs are a good idea for everyone – even children.

If you are a sole or joint provider for your family, however, having the right life insurance policy is even more vital. A basic rule of thumb is to have a life insurance policy with a death benefit of at least three times your annual salary. This is a minimum guideline and will not provide for your family forever, but it will give your loved ones peace of mind and money for a couple years so they can determine how to proceed. Without this life insurance coverage, your loved ones could be placed not only in a devastating emotional situation upon your death, but also a devastating financial situation. Having some life insurance coverage can protect them.

There are several types of life insurance policies and you should be familiar with each option before making an insurance policy decision. A life insurance agent can explain the intricacies of each type of life insurance as well as how each policy would apply to your particular life and family situation. Basic types are term life insurance, whole life insurance, and universal life insurance. Term life insurance policies only pay a death benefit if the policy holder dies within the term period. Whole and universal life insurance policies don\’t have a term on death benefit payout, but the insurance premiums are generally higher. While whole and universal life insurance policies provide an element of long-term savings, they should not be considered retirement plans but may be a part of a long-term life plan.

Many employers provide some kind of life insurance policy for their employees. If your employer provides this life insurance benefit to you, be sure you understand the insurance policy provided. It may or may not be enough insurance to cover your family\’s needs in the event of your death. Keep in mind the life insurance policy will also likely terminate when your employment ends. If your employer\’s life insurance coverage is not sufficient for your needs, you may be able to opt to contribute additional money toward the policy to increase your coverage, or you may opt to open your own life insurance policy independent of/in addition to that provided by your employer. In either case, be sure you understand how to convert the policy to your own life insurance policy in the event your employment with that company ends.

There are several types of life insurance policies and you should be familiar with each option before making an insurance policy decision. A life insurance agent can explain the intricacies of each…. Learn more at

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