Sunday, February 05, 2006

Life insurance to buy or not to buy

Many young people don't buy life insurance thinking that they don't need it. They feel that they are young and won't die. Additionally, a lot of people that don't have any dependants such as a spouse and kids also do not feel the need to buy life insurance. There are several important reasons to buy life insurance early in your carreer.

  1. First of all you can usually buy life insurance on a fixed rate that the insurance company will hold for 10 years. I bought a policy and it was $225 per year for ten years. A $250K policy will cost you $270 per year and they will hold the rate flat for 20 years. That rate stays the same until you are 40 years old. At this rate it is less than a $1 per day. You spend a lot more than that each day on gas, coffee, lunch, beer etc.
  2. Also you maybe 20 years old now but in five years you might get married and start having some kids. You and your wife might buy a house. Having a $100K or $250K in life insurance is an excellent safety net.
  3. Some policies also have benifits if you get hurt such as loosing a limb or and eye. All things that you may not want to think about however, after you get hurt you can't buy the insurance and expect the coverage.

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