This is an American CBS Boston News article today. Keep in mind it is US so there are different policies there than in Canada we have a different premium quoting website but interesting article or you can watch the news video on the link:
Cutting Life Insurance From Budget Is A Bad Idea
By Paula Ebben, WBZ-TV
October 10, 2011 2:25 PM
BOSTON (CBS) – Life insurance is something we should all have, but it often gets cut from the family budget when things get tight.
In fact, the number of families without a life insurance policy is at a 50-year low which can create a risky situation.
Many people question whether they really need to get a policy.
Financial advisor Ray Martin responds, “I think the way to think about it is, if I passed away, and my paycheck passed away, how would my family or the people who are dependent on me, and my paycheck, make it by every day?”
In a survey, 40-percent of households with children said they would have trouble paying their bills if the family’s primary breadwinner suddenly died.
Although life insurance can be confusing, there are a few basic guidelines for most people to follow.
The first challenge is to determine how much coverage to buy.
Martin said, “You want enough insurance to pay off all of your debts. That can be a mortgage, student loans, or car loans. Then you will also want an amount of money that can replicate your income.”
The policy should be large enough to cover future expenses, such as college tuition or retirement funds for a spouse.
Financial experts suggest you consider term insurance first.
Polices cover a set period of time, usually 10, 20, or 30 years. Term is the most affordable type of life insurance.
Martin explained, “If you are a male and you’re 35-40 years old, half a million term insurance policy, a 20-year term, can cost $400-$600 a year.”
Policy prices vary so it is wise to shop around for the best deals.
Sites like accuquote.com and insure.com can be very helpful. You can also ask an insurance agent to get quotes from several companies.
Keep in mind you will pay less if you are young and healthy.
Martin advises, “As soon as you are thinking about the topic, get on it and do it. Don’t wait because you are in a good health, because you’re life can change on a dime.”
Another type of life insurance is called whole.
It is considerably more expensive than term, but it is considered an investment because it builds equity.
