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1/5/2009
Monday morning
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| In view of what we just experienced on naijanet from the passing away of
one of us and the subsequent discussion of life insurance, I am forwarding
this article to the net. I had written the article for the May 1996 issue
of the NACO (Nigerian Association in Colorado) Newsletter, and had posted
it on naijanet net about a year ago when a Nigerian passed away in
Baltimore and there was subsequent discussion of life insurance. The
articles addresses issues such as: |
| Advantages.
* Much less expensive than whole life, e.g., term life may be as much as
ten times less expensive than whole life for the same amount of coverage. *
Lower premium costs provides you the opportunity to save through
investments outside of the policy. * Separate life insurance policy from
your investment programs affords you more flexibility to change either your
protection or investment program without affecting the other. * Greater
control over your choice of investments. * Can retain full access to your
alternative savings and investment products outside of your policy |
| There are four varieties of term life: Annual Renewable Term (ART), Level
Term (LT), Modified Level Term (MLT), and Decreasing Term (DT). The
differences between them are in the way the premiums and death benefits are
structured. |
| To pick a life insurance policy that is best suited for you, you should
consider the advantages and disadvantages and relate them to your
particular situation. However, if you are the breadwinner of a young
family with limited resources (which is true of most young families), you
will most probably be better off with term life because you will be able to
afford a greater amount of death coverag e for the same amount of premium.
On the other hand, if for any reason you want coverage throughout your life
or for more than 20 years (e.g., because of health reasons or for estate
planning purposes), then a whole life policy may be your best bet. |
| Should it include the baby, the high school student, the college student,
the young couple just starting out, the couple with a growing family, or
the older couple whose kids have all moved out? Everyone should have life
insurance because some expenses will be incurred in the passing away of
anyone, even a baby, such as funeral expenses. For everyone to have life
insurance, however, is an ideal situation. On a more practical basis, you
should have life insurance if you are a breadwinner of your family in order
to protect your d ones from financial difficulties arising from loss of
income that will result from your premature death. |
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