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September 09, 2010

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Great summary of life insurance. Seems like this must be an excellent book.

"Therefore, you typically will only have a need for life insurance when you are leaving behind someone or some entity that is dependent on your income."

While the entirety of the article is interesting and informative, the idea quoted above is pervasive and, in my opinion, results in way to many housewives and stay at home moms or dads who are uninsured or underinsured. Those men and women are contributing so much to their families and even though it is not traditional income, the work they do is something that would have to be paid for by the family if that person passed away. I think it would be a mistake to read this article and walk away thinking that if you don't have income, you don't need insurance.

Jen --

I think you are correct. But I think a stay-at-home mom or dad fits into their line of thinking. After all, families are dependent on the "income" of the one who stays at home (even though there is no actual income -- they are dependent on their work.) This is why we have life insurance on both me AND my wife.

For those who have maxed the traditional retirement accounts (IRA's, 401K's, SEP's, etc) and have no consumer debt and more income to invest for a LONG PERIOD of TIME (caveat), there are SEVERAL types of permanent insurance that ALSO are EXCELLENT investment vehicles to compliment the traditional ones above. In the past 10+~ years, life insuranc investments have typically WAY outperformed traditional equity invetments. Glad I've owned permanent life insurance since 1987! Surprised that LI as a investment alternative often isn't talked much here but, if the audience isn't the market (high earning professionals -typically), LI often gets passed by, that's too bad as permanaent whole life insurance was the first "type" of life insurance sold. Many companies have been around almost 200+~ years!

If one buys a life insurance, here are some additional tips that can be very useful:

1. Do some research prior to purchase ( do your homework)
2. Check company’s financial health
3. Company size, time in business
4. Company’s history of complaints
5. Seek assistance from Insurance professional

The above reference to California Casualty is incorrect and needs to be removed. The url referenced does not belong to California Casalty and we do not sell life insurance. If you are the author of this post please remove.

This is an interesting post on the origins of life insurance. Like the author says, many consider buying life insurance a morbid task because of its implicit connection to one’s death. But purchasing a life insurance policy is one of the most crucial financial decisions of an individual’s life as it secures the future of those who survive him or her.
If you have people who depend on your income to provide for them, just think of the impact on their lives if you’re no longer around. The more your financial obligations, the greater is your need for a life insurance policy so your loved ones are taken care of should something happen to you.

Denise at AccuQuote
Disclaimer: I work for AccuQuote and this is my personal opinion.

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