Agent Owner, Gilmore Insurance Services, Marysville, Washington State
How long a person needs insurance is of individual importance. There isn't a blanket answer for everybody. One person may only want coverage for a set period of time. Another may want coverage till the day they die. Who's correct in their choice? They both are if that is what they wish.
About the only thing I would suggest if you decide a limited period of time is all you need for life insurance, is to cover your bet with convertable term insurance. That way if you decide you do need coverage till the day you die, you've got that option.
I always suggest keeping at least enough Life Insurance to cover final expenses. Even if you have investment money or money set aside you feel is earmarked for your final expenses, with the economy the way it is, you can lose a great deal of your investments in a short period of time. If your health declines you may be forced to go to a nursing home which will eat up any assets. A properly set up Final Expense Policy can help protect that money by utilizing a Funeral Trust. Life insurance is also protected from lawsuits and creditors.
Co-Founder, TermInsuranceBrokers.com, Goldenzweig Financial Group, Las Vegas, Nevada
Complete a life insurance needs analysis - there are general worksheets that you can google for, however, to get the most accurate picture, you should talk with an independent life insurance broker.
The purpose of the insurance is a driving factor in determining how much and how long you need the coverage for (e.g. paying off a mortgage, income replacement, estate planning, family protection, etc.). Someone only looking to pay off debts only "needs" the coverage til the debt is paid off. For example, if you have a $500,000 mortgage that should be paid off in 30 years, you would only "need" the coverage for 30 years, so a permanent be suitable to the need. If you're looking to provide income for your family in the event of your death, you may want a combination of term and permanent coverage.
Realistically speaking, most people are not going to purchase enough coverage to cover every need that they have - many times this is because they can't/do not want to write the check for such a high amount. You should look at which are the most critical needs you want to meet, how long do you need to have each of them covered for - this will point you in the direction of how much coverage is appropriate to have and how long you will need it for.
If you have any other questions or would like help with your coverage, send me a message by clicking on the "contact me" button, or call me at 703-665-9133.
There are different schools of thought on how long you need life insurance.
Some believe that you only need life insurance until you save up enough so that your dependents would do OK, even if your died prematurely. That philosophy is often called, "buy Term, invest the rest." Those who like this idea tend to buy shorter terms and pay as little as possible for their life insurance, with the hopes that by the time their Term policy ends, they will not need to buy more. Some choose the age of retirement as their cutoff point for owning life insurance, with the intention of having all debts paid off and money for retirement saved up by then.
On the opposite side of the fence are those who would use life insurance for a lot of their supplemental income and security in later life, and thus only buy permanent policies. Not only do they spend more on premiums than those who buy Term only, but they may even increase their premiums so that their policies are paid up by the time they retire.
Many people fall somewhere in between. They buy what is most cost effective for each particular need. E.g. They may buy Term for the bigger expenses in their lives, such as getting their kids raised. And they might buy a smaller Whole or Universal Life policy for their final expense needs. Then try to diversify their investments as is prudent at each stage of their lives, and in accordance with the economy, and products offered at that time.
How long one needs life insurance depends upon the purpose of the life insurance. If the purpose is to cover a 5 year bank loan, then you need it for 5 years. If the purpose is to pay estate taxes, then you need it to last until the 2nd spouse has passed away. If you need it until your mortgage is paid off, then you need it for that number of years, etc., etc.
Point is, first define the need, then it's easy to figure the length of time.
Not a simple or short answer. While there are huge numbers of people in the US that do not have life insurance, the length of time to purchase life insurance depends upon the reason for the life insurance. People who have large estates will use life insurance as a planning tool to help pay for estate taxes. Some will need life insurance purely as a death benefit. Others will use to generate tax free retirement, where the cash value is not tied up & can be used before reaching retirement age as Walt Disney to complete the financing to launch Disneyland (in CA).
Best advice... get with a consulting agent with experience with all of the above and allow them to help decipher your individual needs.
President | Founder, CLM Insurance Group, Delray Beach, FL
Until the day you die! Your death benefit needs may change and the type of policy you carry (term, permanent, universal etc) may change, but you always need it. There is no stage in life (or death) where a life insurance policy [the correct one] isn't an asset to your overall financial picture. Obviously, there will be times where it becomes more obvious to carry real death benefits with the intention to protect loved ones, future college educations, costs of living and paying off obligations like mortgages, but don't be fooled into thinking that a $20,000 final expense policy isn't worth the money. regardless of the insurance policy, you'll be happy you had it in place when you needed it.
For more information on the proper amount of life insurance needed visit www.clminsure.com or call 561-320-2978
Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
You need life insurance as long as you love someone. You need life insurance if others will suffer loss because of your premature death. You need life insurance as long as a lender requires it to cover a loan. You need life insurance as long as you want to see those that you love receive an inheritance from you.
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About the only thing I would suggest if you decide a limited period of time is all you need for life insurance, is to cover your bet with convertable term insurance. That way if you decide you do need coverage till the day you die, you've got that option.
The purpose of the insurance is a driving factor in determining how much and how long you need the coverage for (e.g. paying off a mortgage, income replacement, estate planning, family protection, etc.). Someone only looking to pay off debts only "needs" the coverage til the debt is paid off. For example, if you have a $500,000 mortgage that should be paid off in 30 years, you would only "need" the coverage for 30 years, so a permanent be suitable to the need. If you're looking to provide income for your family in the event of your death, you may want a combination of term and permanent coverage.
Realistically speaking, most people are not going to purchase enough coverage to cover every need that they have - many times this is because they can't/do not want to write the check for such a high amount. You should look at which are the most critical needs you want to meet, how long do you need to have each of them covered for - this will point you in the direction of how much coverage is appropriate to have and how long you will need it for.
If you have any other questions or would like help with your coverage, send me a message by clicking on the "contact me" button, or call me at 703-665-9133.
Some believe that you only need life insurance until you save up enough so that your dependents would do OK, even if your died prematurely. That philosophy is often called, "buy Term, invest the rest." Those who like this idea tend to buy shorter terms and pay as little as possible for their life insurance, with the hopes that by the time their Term policy ends, they will not need to buy more. Some choose the age of retirement as their cutoff point for owning life insurance, with the intention of having all debts paid off and money for retirement saved up by then.
On the opposite side of the fence are those who would use life insurance for a lot of their supplemental income and security in later life, and thus only buy permanent policies. Not only do they spend more on premiums than those who buy Term only, but they may even increase their premiums so that their policies are paid up by the time they retire.
Many people fall somewhere in between. They buy what is most cost effective for each particular need. E.g. They may buy Term for the bigger expenses in their lives, such as getting their kids raised. And they might buy a smaller Whole or Universal Life policy for their final expense needs. Then try to diversify their investments as is prudent at each stage of their lives, and in accordance with the economy, and products offered at that time.
Point is, first define the need, then it's easy to figure the length of time.
Best advice... get with a consulting agent with experience with all of the above and allow them to help decipher your individual needs.
For more information on the proper amount of life insurance needed visit www.clminsure.com or call 561-320-2978