What is the Best Life Insurance Coverage for Me?
Reader’s Question:
I am a 30-year-old store manager here in Nevada. I want to get life insurance coverage but only until I’m 60 because, you see, I don’t to be paying any bills by the time I retire. What can you suggest?
Richard
Reno, NV
Hey, Richard. Sounds like you are retiring in a grand fashion there in Nevada. “I’m 60, that’s it. No more bills.” Well, Richard, I share your opinion also. When we come to that stage in life, I sure hope to be worry-free and relaxed. Maybe even travel the world. Well, in any case, I got your point. Nothing should be bothering us except how to spend our pensions, eh?
Richard, if you really think that you won’t need anything else by the time you’re 60, then term life insurance is your best bet if you are scrimping on budget. A term life insurance policy is cheaper than a whole life policy relative to face amount–meaning for the same face amount, your term life is way cheaper than a whole life insurance policy. You can also convert your term life insurance to a whole life policy should you change your mind.
However, Richard, most people find that term life insurance at a disadvantage. It is because at the end of the term, all premiums paid over the years are good as gone. What most people misunderstand about life insurance is that during when the policy is in force, the life insurance company is taking great risks in underwriting term life insurance as they give out higher face amount to term life policy holders, compared to other types of life insurance. You may not get anything at the end of the term, not even the amount you paid for, but this works really much to your favor as they promised to give you coverage for a number of years at a cheap rate and at a higher face value.
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