Should I Have Life Insurance?
05 Aug 2015
While you’re accumulating an estate, you need to protect against the fact that you don’t yet have an estate. In other words, you still want to provide dollars for your survivors even if you do not have time to accumulate enough money to provide for them. You want to meet their basic needs as well as assist them in achieving goals.
Life insurance companies are astute at business—and their business is to mitigate risk. I like to refer to them as risk merchants. They know how to make a profit—and that, of course, is what you want. Would you trust an insurance company that wasn’t profitable? When the chips are down, and you need that insurance company, you will want it to be a sound business that is financially stable. You will often hear people demonizing insurance companies, but let me assure you that they are well regulated. They are required by law to have levels of reserve that are far higher than a bank or the federal government must have.
In considering life insurance, ask yourself these questions as you begin to assess the type and amount you will need:
- Do I have outstanding liabilities that would burden those I left behind?
- What would the economic impact be to my family if I weren’t here?
- Would all of the goals that I have set be accomplished? Is that important to me?
- How long is the period of risk that the life insurance should cover?
Who will be the beneficiaries of the policy?