You are young, single, with no dependents. Forget life insurance. Buy disability coverage and add to your investments instead.
Ignore an insurance agent who advises you to buy cash value coverage because premiums are lower for the young. If you do not need insurance, you would be wasting your money. It is like buying a tennis racket just in case, ten years from now, you might want to learn the game.
Besides, insurance premiums rise so slowly that waiting does not matter much. If you buy a $100,000 term policy at age 40 instead of 30, you might pay an extra $27 that year. Big deal. A cash value policy might cost you an extra $550 or so. If you skip the insurance and bank the money you do not spend, those accumulated savings will probably cover the higher premiums you might pay in the future if you should ever need a policy or a semi truck loan.
An agent might also argue, “Buy now just in case you develop a dread disease, become uninsurable, and then discover a need for insurance.” You might just as easily marry a zillionaire and not need life insurance at all. The odds of either are small. One exception: You might want to buy cash value coverage if you are lousy at saving money. Many insurers let you withdraw part of your policy’s face value if you become terminally ill; alternatively, you may be able to sell the policy for 50 to 70 percent of face value. So for you, insurance is like a big savings account.
You are older and single, with no dependents. Maybe you never married. Maybe you are a widow whose children have left home. You need no insurance. If you do have coverage, investigate what it is earning and ask yourself whether you would rather have ready money than cash building up inside an insurance policy. Your beneficiaries might prefer that you keep the policy. But if you need more income to live on, cancel it and save the cost of the premium. Put the cash value, if any, into savings or investments.
You are single, with dependents. What happens to those dependents if you die? If you are a divorced parent, and the children would go to the other parent, you may not need life insurance if the other parent can afford to take care of them. If not, keep the policy for the children’s education and support (your lawyer, financial planner, or insurance agent can help you make sure that the money goes to the kids, not to your ex, perhaps by leaving the proceeds in trust for them, including title loans Atlanta.
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