So you are an adult now, you no longer live in your parents basement, you have used an iron more than once in the last 12 months, you no longer eat an entire pizza in one sitting and staying up past 11:00 p.m. has become a physical challenge. Congratulations, you have become a less exciting version of yourself.
Step off the ledge, it’s not that bad, you have just entered a new chapter in your life. So does that mean you are supposed to be thinking about other “less-than” exciting things, like life insurance?
How do you know if you need it?
Well, it’s actually pretty simple. You just need to ask yourself one question. “Would my untimely passing leave someone in a financial pickle?” If your answer is yes, then you might want to finish redecorating your master bedroom and get to know your options a little better.
There are many reasons people buy life insurance, however what it all boils down to is protecting your loved ones from your future financial commitments. This could be a significant amount of credit card debt, mortgage, car payments, student loans or if you're really lucky, all of the above.
Life insurance can also help maintain a standard of living for your family. Even if you have minimal outstanding debt, replacing your yearly earnings is no easy task. You are going to want to consider a policy that will provide at least until your youngest child graduates college. Or however long you wish to replace your income for a spouse or loved one.
How Do You Get It?
Most life insurance policy require you to undergo a medical exam before coverage can be approved. This exam will draw blood to check things like cholesterol and blood sugar. A urine sample is also collected to check for any foreign substances. Your height, weight and blood pressure will also be verified during the exam.
What are your options?
Term life insurance pays a predetermined amount of money (face value) if you were to die during the specified period. You can buy term coverage generally for one, five, 10, 20 or 30 years. Since the coverage is only for a specific amount of time the coverage ends at the end of the term, unless renewed, and is the most affordable option. Most term policy's have the option to be converted into permanent insurance any time during the term period.
Permanent life insurance provides lifetime insurance protection. This type of protection generally offers a savings or investment option in addition to the death benefit. The ability to do so however leads to higher premiums than a term policy. The investment can offer a fixed interest rate or be handled in the form of a money market security, bond or mutual fund. The accumulated savings, or cash value of the policy can be borrowed or distributed at a later time.
Do you have enough adult responsibility to need life insurance?