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Insurance
Although some people
(especially some insurance agents) will disagree, we generally don't
like to think of insurance as an investment -- and perhaps you shouldn't,
either.
It's true that some "investments" in insurance
will appreciate in value, but the main point of insurance is protecting
you against the financial consequences of losses, not serving to
increase your wealth. If you're looking for long-term investments,
there are many options more attractive than insurance -- chief among
them, stocks. If you're looking for protection against floods, car
accidents, appendicitis, or death, you need insurance. (If you're
looking for company on cold, winter nights, you may need a cat.)
It might be attractive to consider insurance policies
that have investment components, but think twice. These kinds of
policies, such as whole-life insurance, tend to be more expensive
than their alternatives (such as term-life insurance). You can often
afford to protect yourself against greater losses by opting for
insurance that doesn't serve as an investment.
Once basic items such as shelter
and food are covered, life insurance should be next on your list
of priorities. Imagine yourself gone tomorrow; what would the immediate
impact on your family be? Are they counting on your paycheck in
the years ahead to cover basic needs and future savings goals? Could
they afford the funeral costs? Who would pay the home mortgage?
Would your family be thrown out on the streets? At this stage in
your life, if you still don't have life insurance, maybe it's time
to consider getting some -- not for your sake, but for your family's.
Simple Term life insurance, much like car insurance, is the essence
of simplicity -- pay the premium, get covered for the term. Competitive
prices Because of their simplicity, term life policies can be easily
compared on the basis of price alone, which has effectively led
to extremely competitive prices. Flexible Most term policies are
very flexible, allowing for both renewable (you can renew for another
term policy without a medical exam) and convertible terms
They find themselves uninsurable
when they discover they have some critical illness. People should
give life insurance buying serious thought at least once per year
as ones situation may change and you find that your need for life
insurance may change as a result.
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