Ideas, tips and news about life insurance and the uses of life insurance

An article in the L.A. Times on life insurance goes over the crucial need to have adequate life insurance to protect your loved ones and gives some stories about people who didn’t have enough life insurance.

Adequate life insurance, as discussed in the L.A. Times article, should be a key part of one’s financial plan. An example is given in the article as follows: “A 47-year-old man spent his six-figure salary so fast he had no savings to speak of and a mere $30,000 in life insurance. (Why worry, he would say, things always turn out fine). They didn’t for his wife and two college-age daughters who had to beg acquaintances for help after he died in a car accident.”

This is a sad situation. Calculating the amount of life insurance you should have is really pretty simple. The simplest way is to calculate a multiple of your gross income. 10 times your income is the least you should have. Someone making $100,000 per year should have at least $1 million of insurance. 20 times income is usually the maximum an insurance company will offer. Getting life insurance is not hard these days with online life insurance sites like lifeinsure.com which quotes term life insurance and universal life insurance instantly online (and anonymously) along with the new return of premium term life insurance. You can see pricing right on the site and then click to have someone set it up for you.

posted by Richard Reich at 10/26/2006 04:30:00 PM links to this post

An article from USA Today on life insurance talks about the fact we’ve noted in this blog that you can get life insurance even less expensively than in the past and that the prices keep coming down. From the article: “. . .you can buy a lot of life insurance without spending a lot of money. Average premiums for individual life insurance have been falling about 5% a year since 2000, and they’re expected to drop an additional 4% in 2007.”

The article also mentions that millions of people don’t have enough to provide financial security for their families and says: “Millions of Americans have no life insurance, and millions more don’t have enough to provide financial security for their loved ones. That’s a shame, because if you’re reasonably healthy, you can buy a lot of life insurance without spending a lot of money.”

Life insurance premiums have dropped significantly in the past 12 years. Here are some sample annual rates shown from that article for a 40-year-old non-smoker who buys a $500,000 term life insurance policy with preferred rates since 1994. The article doesn’t say how long a term period they’re showing but it looks like 10 year term life insurance. 1994: $995, 1996: $660, 1998: $515, 2000: $480, 2002: $395, 2004: $375, 2006: $352.

If you go to the LifeInsure.com web site you can get more accurate quotes. A search at that site for the 40 year old male non-smoker shows the lowest preferred annual premium at $285 for a preferred rate for 10 year term and $460 for 20 year. With super preferred rates the annual rate shown is $210 for a 10 year term and $355 for a 20 year term. Remember that super preferred (or preferred plus) has very strict guidelines on health and family history. You can go to the lifeinsure.com website and check rates anonymously and instantly for yourself.