Life Insurance: A Sound Alternative to Investing in Wild Financial Times.
It's almost impossible to escape all the bad news coming from the United States economy these days. Our national debt is piling up, unemployment remains high nationwide, and people's 401k accounts and other investment funds tied to the stock market are taking a serious hit.But even as millions of financial portfolios go into meltdown, there are safer alternatives to risky investments, including purchasing various types of life insurance. In many cases, buying a policy can provide a stable foundation on which to build a long-term family financial plan.
Look at Different Types of Insurance
A cash-value insurance policy can serve as emergency funds to be tapped into as needed. If the death benefit rises to a level that is more than a policyholder's survivors will need, cash loans can be taken out from the cash-value policy. And best of all, under current tax laws, the proceeds from a cash-value life insurance policy are paid to surviving beneficiaries income tax free.
A blended policy, which combines whole life and term life into a single holding, is another popular choice for some consumers looking for a safer-than-Wall-Street investment alternative. However, whole life can carry high monthly premiums that deter some consumers from buying a policy.
As another option, some people opt to purchase a term life insurance policy - which provides coverage for a specific period of time and costs less than cash-value policies - and invest the savings from the less-expensive premiums.
However you approach it, buying life insurance generally may amount to a safer, more stable alternative asset, even in these crazy and uncertain financial times.
Term Life Insurance Buying Tips
Many consumers are unsure about the different types of life insurance, what type is best for them, and how much coverage they will need. To help make the process a little easier, it may be a good idea to review some term life insurance buying tips:
- Purchase enough insurance to meet all your needs, especially future ones. Skimping on your coverage today can leave your spouse, children, and others without enough money to live after you are gone. Be sure to add in the costs of mortgages, education funds, and other expenses your loved ones will have to shoulder without you. Use an insurance calculator to more accurately estimate your current and future life insurance needs.
- Tailor your coverage to your individual needs. Life insurance is not a one-size-fits-all deal and we all have different needs. For example, make sure your dependents are covered until they are adults or can otherwise provide for themselves and that your surviving spouse is covered until he or she reaches retirement. Be sure to research the different types of term life insurance available to see that the type of policy you select is a good fit for your individual situation.
- Buy coverage when you are young and healthy, when you will generally earn the lowest rates. Many people put off buying insurance until they are into their 50s and 60s, only to find out they either cannot get coverage or must pay higher premiums due to health factors. Also, consider policies that require a medical exam to get the lowest rates.
- Tell the truth, the whole truth, and nothing but the truth on your policy application. It may be tempting to say you don't really smoke two packs a day or that you aren't 25 pounds overweight, thinking that you are going to save money on your policy. But if you lie on your application, chances are your beneficiaries will not receive the funds they deserve when you pass away because you were dishonest in obtaining the coverage. And who wants that?
