Comments on: Does EVERYONE Need Life Insurance?

By: sam

sam — Tue, 19 Sep 2006 21:49:10 +0000

Emily,
Sounds to me like you are taking a bunch of good steps. Congratulations.

By: Emily Cassidy

Emily Cassidy — Tue, 19 Sep 2006 14:20:35 +0000

Thanks JLP! I am a financial mess. I am 43 but it’s like I just landed on this financial planet. I am not wealthy I make about 50k a year. I started paying attention to my finances right after I bought my condo 3 years ago (130k 30 year mortgage at 5.25). I was in credit card debt for 7k I cut up my cards and no longer use credit cards or debit cards. Then I read a few personal finance sites. I keep a budget. I started an emergency fund. Last year I started a 401(k) which I put 20% of my pre-tax towards (I never knew I had to save for my own future!). I have a roth IRA that I put $150 a month into. I got the term life insurance. I do not have a car (I am visually impaired). I give to two children’s charity every month. My cc debt is now at 900.00 (soon to be $0). My savings isn’t great because I had a dental emergency that drained it. I am back on track though I am extremely frugal. I wanted to make more so I got a second job. I also sell works of art at various art shows for extra income. Am I missing anything? What else should I be doing? Thank you again!

By: S/100/30

S/100/30 — Fri, 15 Sep 2006 16:09:18 +0000

I think it depends on her net worth. If she’s fairly well off, she definitely doesn’t need life insurance.

By: samerwriter

samerwriter — Fri, 15 Sep 2006 06:39:24 +0000

Insurance isn’t ever cheap. It’s a pretty sure bet that the insurance company will get more money out of you than you’ll get out of them.

The cost may be worth it if you’ve got a family who is counting on your income. But otherwise it’s a losing proposition.

By: JLP

JLP — Fri, 15 Sep 2006 03:34:30 +0000

Todd and Sam,

I don’t sell insurance and I have a distaste for insurance products that are sold to people as an “investment” because insurance isn’t an investment. It’s insurance.

My point was that IF the insurance is cheap and you already have it, why cancel it? I stress the word “cheap.” If it is one of those “permanent” insurance policies with the cash value build up, then yes, it is probably a waste of money.

By: sman

sman — Fri, 15 Sep 2006 01:21:11 +0000

Here’s a simple question I ask potential clients of life insurance,

Would someone you care about suffer financially if you passed away?

If the answer is yes, and they don’t have coverage, we need to consider it. If they answer no, I don’t pursue the issue.

Pretty simple ands straight forward question.

By: sam

sam — Thu, 14 Sep 2006 22:43:16 +0000

I like Todd’s answer. Life insurance in particular, and insurance in general is an area where there is too much emotion and not enough analysis. And it doesn’t help that most insurance is marketed with a huge dose of FUD.

So the cost of insurance goes up as you age. You have avoided paying the premium for several years. But you might get a disease and be uninsurable! Yeah, but more likely you won’t.

I’m not saying that all insurance in unnecessary, because I have insurance. Just that many people have insurance that is doing them no good, and would be better off putting the money into an investment instead.

By: Spender

Spender — Thu, 14 Sep 2006 21:00:33 +0000

On the contrary, JLP makes a good point, something could easily change that would make her uninsurable, or her premium higher. Cancelling just because she doesn’t need it NOW is not necessarily the best thing. Heck, saving money and retirement is never about the now. It is always about the later and the “what if”. What if she did cancel her insurance, then she ended up needing it, but then had diabeties, heart problems, high cholesterol, cancer, any number of things. Her policy could double, triple, or she could be uninsurable. Plus, the age the policy maters greatly. She 43 now. Maybe she got term 20 at age 35 or something. Her premium would definitely be cheaper than at age 40, 43, 45, or 50.

By: Todd Brill

Todd Brill — Thu, 14 Sep 2006 20:44:08 +0000

What if you lifestyle changes?
Go buy the insurance – its not complicated or time-consuming.
What if you get married?
Go buy the insurance – its not complicated or time-consuming.
What if you were to have a baby?
Go buy the insurance – its not complicated or time-consuming.

You definately do NOT need insurance unless you want to leave behind money for a charity.