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How Much Life Insurance Do You Need? (part 2)

This is continued from PART 1 Here’s how it works out… Let’s assume that the breadwinner earns $50,000 each year.  We will use the income approach to determine the amount of coverage needed on his life.  The duration of the risk is 25 years and the assumed interest rate is 3% (this is the inflation [...]

How Much Life Insurance Do You Need? (part 1)

What is your life insurance “need”? Well, to get things started off I think that a distinction between “needs” and “wants” is important. For the sake of simplicity I won’t be discussing other forms of insurance (i.e. critical illness, disability insurance). An insurance “need” arises where there are definite, identifiable risks to the people that [...]

Paid-Up Life Insurance – The INs and OUTs

“Paid-up” life insurance or “limited-pay” life insurance is permanent coverage (to age 100) that has a specified premium schedule.  The premium schedule is normally shorter than the coverage period, and the insurance becomes “paid-up” at the end of the schedule.  This means that the coverage continues and no further premiums are required.  In essence the [...]