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Sunday, February 1, 2009

Life insurance

From the Hoss's Mouth


Life insurance, what exactly is life insurance and do I need it?

Hoss Cents Free Financial Money Magazine
will provide you with information that will help you with your life insurance assessment.


Term Life Insurance

There are two basic forms of life insurance: term life insurance and permanent life insurance.

Today's Hoss Cents Free Financial Money Magazine will concentrate on term life insurance with the next issue being devoted to permanent life insurance.

The first question you need to ask is do I need life insurance? If you are single with no dependents you, in all likelihood, do not require life insurance. What money you would pay in premiums could be utilized in other areas of your financial plans. Similarly, if you are a very wealth person, life insurance would be of little benefit.
On the other hand, if you are married, with or without dependents, or have someone else who depends on you for financial support, you should purchase life insurance.

Term life insurance is the most fundamental form of life insurance.

Term life insurance is for a defined period of time. The insured pays a fixed premium annually. If you die during that period, the beneficiary or beneficiaries collects a certain agreed upon amount. Term life insurance provides the most coverage for the least cost. If you do not die, you may be wondering what happens to all that money you paid in in the form of premiums over the years...well, it belongs to the insurance company. Some of it is used to pay claims and expenses and some goes toward company profits. Makes you wonder how an insurance company can ever go broke and require a bail out package from the government.

The Hoss reminds you not to let your life insurance premiums lapse, as claims will only be paid if the premiums are fully paid up to date and the term has not expired.

How much life insurance do I need?

That is the million dollar question. There is no one answer. How much you need depends on an individual's situation. For example, will your dependents (spouse, children or others) have enough funds from your life insurance policy to maintain a good standard of living and satisfy debts and future financial needs? There are many formulas available to help calculate how much life insurance you should purchase, but one size does not fit all; and only you can determine the appropriate amount for your circumstances. Remember, the objective of life insurance is to provide your dependents with financial security if you should die. Do not under estimate your life insurance
needs.


Stay on track,

The Hoss

Next Hoss Cents Free Financial Money Magazine Post: Permanent Life Insurance
Previous Post: Insurance, Insurance, Insurance

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