FRIDAY, JUNE 1, 2012
Life Insurance is a simple answer to a very difficult question: How would my family manage financially if I died today? It's a subject no one really wants to think about. But as parents, it's one that shouldn't be avoided.
5 tips for parents to consider their life insurance decisions:
- Buy when you're healthy (and young) - Your insurance premiums will increase as your life expectancy decreases - the older you get, the more life insurance is going to cost you. And, as you get older, be sure to live a healthy lifestyle because that saves you money as many insurers offer discounts based on good physical health. This frees up disposable income for parents to either put into savings or make necessary yearly family purchases.
- Since you're the breadwinner, don't assume your spouse doesn't need life insurance - If you really think about it, how much would it cost to fill the responsibilities of your stay -at-home spouse? It's the equivalent of a full-time job. According to salary experts, stay-at-home parents would make over $100,000 per year for all of the services they provide for their families. Some of these services include childcare, housekeeping and laundry. Life insurance can help pay for these services and eliminate any financial hardship in the event of a spouse's absence.
- Life insurance is moe important in today's economy - The reality is that families today don't have the financial security that they once had. By purchasing term life insurance policies for both parents, families will have a better chance of surviving financially if something devastating were to happen.
- Term life insurance rates are near record lows - Term life insurance rates are near historic lows. In 1994, a healthy 40 year old male would have paid $995 per year for a 20 year level term policy with a $500,000 death benefit. Today, that same 40 year old male will only pay $350 per year. Rates for women are even lower.
- Buying life insurance is not a one-time activity - Parents or soon-to-be parents should conduct an evaluation of life insurance needs on a regular basis. A life insurance needs analysis should be done at least every two-to-three years because circumstances change (marriage, divorce, re-marriage, childbirth, etc.), and the amount of insurance may no longer be adequate.
Posted 6:28 PM
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