The truth about life insurance

Do you want to know the truth about life insurance? Then, keep reading. You need life insurance if you have a family and you need to provide for them in the event that you die before they do. If you are single, don’t have anyone depending on you, then you do not need life insurance. You could get a small life insurance policy to cover any funeral expenses, so your loved ones won’t have to come up with the money to take care of that expense.

If you do have a family, then you definitely need to obtain a term life insurance policy. Do NOT get a whole life, universal, permanent life insurance, or accidental death insurance. They are a rip-off. You are sold those policies with the allure of the cash value. When you die, guess who gets the cash value? No, not your spouse or kids. The insurance company gets to keep it. Your family receives the policy amount. If you have a $500,000 policy, that is all they receive. Also, these other policies are more expensive than term life insurance. Depending on your age, the more you will pay.

A good term life insurance policy is less expensive than the other policies. You need to purchase at least ten times the amount of your income as the policy amount. If you earn $50,000, then you need a $500,000 policy. If you earn $40,000, then buy a $400,000 policy. Both spouses should have a policy even if one of you is a stay-at-home parent. If the stay-at-home parent, dies before the children are adults, then the surviving spouse needs to hire someone to take care of the children.

The term of the insurance is basically how long you’ll need to have the policy. If you have very young children, then obtain a 20 year term policy. This way, if one of you dies, before the children are out of the house, the surviving spouse has money to take care of the children and live. The money from the policy can be invested in  good mutual funds to provide some dividend income.

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