Friday, September 21, 2012

Buying Life Insurance In Rational

Some people said that cause of you needs affordable life insurance is a risk. Opinion was only half right. Every person has a risk of death, but not everyone needs life insurance. Responsibilities answer that because you need insurance. When you have financial responsibilities that will be a burden other people after you die, you "might" need insurance. If you have a mortgage loan, credit or other loan still must be repaid when you die, then you might need insurance. If you have kids and a wife who will be a burden others if you die, you might need insurance. It says "may", because if your estate is large and can cover that liability, you do not need insurance.

Buying insurance must be rational, not solely because of the feeling. Your insurance agent might be stirring a sense of "family love" that you are moved to pocket to buy insurance. Some of them are very good at it. Some people buy unnecessary insurance or exceed requirements. You should be able to distinguish between needs and wants, compassion and responsibility. A child who does not have financial responsibility does not require insurance. How big was your affection to her, she does not need to insure themselves.
The insurance company would argue that the same product also provides protection against premium payers. That is, if the parents of the children die before paying off the premium, then the insurance premium becomes free (waiver of premium). The child will get all the promised benefits without having to pay anything more. These features you actually need. However, oddly enough, the product is packaged as an additional protection (rider) so you cannot take refuge premium payers without put the child as the primary insured.
Another example: You mortality risk increases with age. The older you are, the more likely you are to die. However, that does not mean your insurance needs also increases with age. At some stage, when all the children had left home and live independently as appropriate, your home is paid off, and your investment in movable and immovable property are huge, the first life insurance you really need is no longer so important. You can reduce your coverage to make up for some of the policy that you have. The money you earn you can use to please yourself and the people you love while you are still alive.