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The need for life
insurance varies over the life cycle. For example, the arrival of children
usually triggers a sharp increase in the amount needed. As children grow older
and leave the nest, most parents eventually see a reduced need for protection.
Term policies are the least costly. They pay death benefits only –
they have no cash value. Policies remain in effect for a specific term, such as
one year, or until you reach a certain age. Visit
www.accuquote.com for online comparisons
of term life insurance.
Whole life, universal life, and other cash value
policies combine a long-term savings and investment product with life
insurance. Canceling these policies after only a few years can more than double
your life insurance costs.
Disability
Insurance
Disability can be more
disastrous financially than death. If you are disabled, you lose your earning
power. You still have living expenses and, often, huge expenses for medical
care. When purchasing disability insurance, ask:
• How is
disability defined? Some policies consider you disabled if you are unable to
perform the duties of any job for which you are qualified. Better plans pay
benefits if you are unable to do the usual duties of your own occupation.
• When do benefits
begin? Most plans have a waiting period after an illness before payments begin.
• How long do
benefits last? After the waiting period, payments are usually available to age
65, though shorter or longer terms are also available.
• What are the
benefits? What dollar amount is promised? Can it be reduced by Social Security
disability and workers’ compensation payments? Are the benefits adjusted
for inflation? And will the policy provider continue making contributions to
your pension plan so you have retirement benefits when the disability coverage
ends?
For more information on
disability insurance, visit www.iii.org and
www.aahp.org. Also see Long-Term Care
Insurance.
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