I am often asked, “So, what type of life insurance should I get?
That’s one of the generic questions pals ask me.
I don’t usually give a direct answer to such questions. I wear a fake face: depending on who I am chatting to. Then, obviously but not always, I put forward some questions to the asker to sound him or her out. I do it strategically: so as not to upset the asker’s mind. Because I know most people come to me with a preset mind. Even if this is not always and absolutely true, it is mostly so. I have a feeling most people are a little on one particular side. They only want to make sure they are on the right track.
Thus, ‘what type of life insurance should I get’ is often a rhetorical question for me.
[I beg your pardon to say so]
After all, I need to give an answer. And, I need to be honest. The answers come in 3 shades:
“I think term life is really a good idea for you.”
“No, whole life insurance is what you had better pick for yourself.”
“A hybrid policy should suit you best.”
Life Insurance before 40
Getting life insurance is not ritualistic like wearing an empty cross when you are a Protestant. It’s a materialistic approach to life. The good, the bad and the good-bad combination all are relative issues.
Typically, I say term life insurance is good for people when they are young. I think when you are within 40, meaning you have more than decades to earn and fill your piggy bank, nothing is as good as term life insurance for you. Your liabilities are limited now: maybe a home or auto loan only. If you have a spouse supplementing income, you have got a lucky goose. Even if you are to tow a couple of loans, your future is better off. So having a term insurance policy is really the right choice for you. You should not be getting into too many financial commitments until you are sure what the size of financial burden is going to be in future for kids and other dependents. Besides, up till 40, expenses go high on lifestyle channels like socializing, newer appliances and gadgets, tours and travels and the like.
So, my point of view is: take as less financial liabilities as you can till you are in your 30s. I mean to say life insurance premium is also a liability when you own a policy. And, term life insurance being extremely inexpensive saves you from big burdens that you need not carry along right now. I hope you will live along for full.
Life Insurance after 40
Not that term insurance isn’t good for people in their 40s. You still have good enough time to make sure you have arrangements to make for your dependents. Your financial liabilities should either be over or be nearing to come off schedule and what lies ahead is the future of your dependents. Obviously, you know how much you have had in your savings check as well as what other funnels you have created so far. That means you are a financially wiser person now. Replacing income and expenses for children’s education past you are your major concerns now. If that is what you are concerned about, term life insurance still is valid for you.
But, if you have your eyes stretching far away, a whole life insurance policy is what could find place in your notebook.
So, when is that?
Well, the biggest plus-pointer for whole life insurance is it keeps your folks ceaselessly in protection. Your longevity is waning now with the mercury of concerns going up. That places you in a situation wherein you might find it useful to have an extended protection with some bucks stored in your bucks as bonus. A whole life insurance packed with cash value side and dividend might really be the very thing you should find yourself content with. Lucky may you go for it now.
What about Hybrid?
Hybrid isn’t that bad for you when it comes to your asking: what type of life insurance should I get? But of all the one that I emphatically suggest to folks is what they call Return of Premium insurance (ROP). The reason is it’s a term life insurance with cost lower than that of whole life insurance (slightly higher than level term insurance) that brings you lifelong protection. What’s more important is you don’t return empty-handed when your policy comes to end. The money you pay for till date returns to your check.
So, what do you think I suggest? – You might find it a clever answer. It’s your capability and need that should come into your visuals when you wish you clearly knew answer to: what type of insurance should I get?
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