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Do I Need Insurance?

If you have any dependents, or debts that someone has cosigned on your behalf, you should consider a term policy. I believe that “no dependents, no need for life insurance” is valid for most people. One exception that may apply (I’m not fully convinced) is when the individual is likely to have the need for insurance at some point in the future, e.g. they have a strong chance of getting married and wanting children. It’s easier to buy insurance at a younger age and there’s always the chance that one becomes uninsurable just at the point when the need arises. I believe that there’s a much greater need for disability insurance. The numbers show far more people become disabled before retirement age than dying. Something to consider.

  • JAL November 19, 2007, 1:15 pm


    You may have mentioned this before somewhere in your blogs or articles, but it might be worth mentioning that another standard use of term life insurance (when a person might not otherwise have a justification for it) is to leave extra money behind for your heirs to pay any estate tax and/or income taxes which will be triggered by your pre-tax investments such as traditional IRA’s, 401(k)’s, etc. Uncle Sam can take a *significant* chunk of what you leave behind in many cases. Since life insurance payouts are tax free to the recipient, they can be a great gift to heirs for dealing with the tax liability.

    Happy Thanksgiving!

  • JOE November 19, 2007, 1:58 pm

    Excellent point – I will post later this week to discuss the benefits of insurance, including the issues regarding estate planning. Happy Thanksgiving to you and yours as well. Again, thanks for visiting.

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