OK, take this quick quiz:

What do Fishermen, Loggers and Pilots have in common?

Give up?

They work at the three most dangerous and deadly occupations in America! That means, if you’re a fisherman, logger or pilot, insurance is likely to cost you more than it costs a worker in any other occupation in the U.S.

When I first heard this statistic, I balked.

“How dangerous can fishing be?” I thought. “How can standing in the water or on a boat trying to hook fish be dangerous?”

I had it all wrong. Fishermen do much more than that. They work long hours on rough seas, in unpredictably bad weather and often in isolation—which makes it difficult to reach them in case of emergency. Together, these three factors make the job the most unsafe profession there is.

When it comes to logging, that one made more sense. It stands to reason that, when you’re in the forest cutting down trees, you stand a fairly good chance of a tree falling on—or at least near you, right? (But if no one was around, would it actually make a sound when it hit the ground? Sorry, that’s a topic for another day!)

Regarding pilots, I could totally understand the danger involved in their jobs, which often depend on clear weather and perfect communication to avoid mishaps. (One bumpy flight and you couldn’t pay me enough to stay in that cockpit!)

Because of the risk involved in these three jobs—which often require workers to perform perfectly in perilous or unpredictable conditions—insurance companies charge them higher life insurance rates than the average person to cover the added risk.

But job function isn’t the only determinant of insurance rates, either.

“Generally, high-risk jobs affect life insurance, but not health premiums,” says Cheryl Randolph, spokeswoman for UnitedHealthcare. ”Health status is much more predictive of medical risk than a high-risk job.”

On the other hand, a healthy person with a safe job would pay lower premiums for individual medical, life and disability insurance than a healthy person with a high-risk job, she says.

If you’re shopping for lower insurance rates, we definitely don’t recommend fishing, logging or flying, to be sure. But other occupations are almost as deadly.

To find out what they are, and how they affect your premiums, read our article on dangerous and deadly jobs now.

If you’re one of those people who puts off holiday shopping until the last minute (hello, it’s Christmas Eve!), we have an idea that could save you time and hassle this year.

Rather than buying another toy your child doesn’t need, giving your wife a box of chocolates, or choosing another argyle sweater for grandpa, consider a healthier alternative that could bring an ear-to-ear smile and a happier, fuller life: a new pet!

Now, don’t get us wrong; we’re not advocating giving an animal to someone who can’t or won’t take care of it. We have enough strays roaming the streets, and our shelters are full of forgotten animals.

But for those responsible enough to love and care for them properly, pets offer a great gift-giving alternative—and can help their owners get and stay healthy. That means greater quality of life and lower health and life insurance rates, too.

If you’re looking for something special for a friend or family member this Christmas, consider visiting your local shelter or breeder and bringing home something furry this year (and we’re not talking slippers!)

If you need a reason to do so, here’s half a dozen health reasons to contemplate along the way:

• Lowered risk of heart disease
• Greater chance of survival following a heart attack
• Depression/dementia relief
• Reduced occurrence of doctor visits
• Increased ability to deal with stress or traumatic events
• A more physically active life

Pets add so much love and companionship to our lives. But they also help keep us healthy! So while you’re racking your brain trying to come up with unique gifts to give this year, consider giving someone you love a new best friend.

You’ll be helping them stay healthy in the process…and may just extend their life!

Additional Resource:

For more on how pets contribute to increased good health, read more on the subject here. Happy holidays!

Yes, you read correctly. Along with the never-ending debate over the health risk of secondhand smoke vs. smokers’ right to smoke, recent research reveals that smoking can actually save lives—as long as the smoker inhales a different kind of cigarette.

Already tested in the Big Apple and proven to save lives there, New York has seen a marked decrease in smoking-related fire fatality since adopting sale of what’s known as fire-safe, or low-ignition, cigarettes statewide in 2004.

But how could switching to a different type of smoke save lives? Because this type:

1. Spares millions of dollars in property damage and saves thousands of lives annually
2. Keeps smokers from lighting up so often, and
3. Reduces home insurance claims

Here’s how they work. Containing two or three layers of porous paper called “speed bumps,” fire-safe cigarettes are designed to sense when a minute or more has passed since a smoker last inhaled—and self-extinguish automatically.

That means smokers must puff faster to stay lit-up—or they’ll end up smoking less. And that’s good news for everyone’s health and well being, smoker or not.

Now, legislation is being proposed that could pull traditional cigarettes off store shelves in many more states and replace them with the low-ignition variety.

For more information on the subject, check out our article titled, Save Lives, Smokers: Puff Faster! And watch for low-ignition cigarettes at a store near you.

The following may seem like a morbid thought, but bear with me for a moment.

Have you ever thought about who would benefit most from your death? If your spouse or children are your life insurance beneficiaries, you’re probably in the clear. But if you’re a loner without much family, or you meet someone who suddenly seems interested in your finances for no apparent reason, beware: you could become the victim of life insurance fraud!

On the other hand, anyone who’s really greedy could have it out for you. So found police who investigated the cases of Olga Rutterschmidt and Helen Golay, each of whom won a homeless man’s trust; then forged life insurance applications in his name, ran the guy over, and waited to collect on his insurance policy.

We hear of cases like these all the time in the news. But no one ever thinks it will happen to them.

The law prevents anyone who intentionally kills someone else from receiving their life insurance benefits. And once the insurance company gets wind of insurance fraud, it’s usually all over anyway.

Still…such callous maliciousness gives one pause, doesn’t it? And it doesn’t keep crooks from trying.

The subject brings to mind one of those old, creepy black-and-white murder mystery novels: A woman boards a train for a long trip, falls asleep, then disappears. Everyone saw her get on board; yet following an all-out search, she’s nowhere to be found.

Can’t you just hear that crazy, suspenseful music?

In cases like these, the question becomes, whodunit?, as Jeb asks in his article on life insurance and murder.

Let me add: why? Is it usually mere convenience…or pure greed?

Following the recent passing of the ‘King of Pop’ Michael Jackson, the media and public alike have been all abuzz speculating about the way he died.

Was it murder? Suicide? Or just an accident?

Though Jackson’s notoriety places him on a different level than most of us, we’re all affected differently when someone we know and love passes away. Some of us struggle to believe that person was here one minute, then suddenly gone the next; others, more familiar with loss, simply grieve, accept death—and move on.

Regardless how you deal with it, being left behind is never easy. In addition to the emotional turmoil that accompanies losing a dear loved one, there may also be final expenses to pay, medical bills to cover, moves to make, life insurance claims to file and other life situations to settle.

But sometimes, when people die under mysterious circumstances, that’s all overshadowed by speculation, as in the case of MJ.

Life insurance companies have heard all the wacky stories: people disappearing, then found dead in the strangest of places; some dying for no apparent reason at all, then autopsied and a strange condition found; others meeting their demise in a place or situation that completely defies reason.

Some of the stories are wackier than others—and some are simply a matter of timing or circumstance. But regardless how they occur, death comes to us all…it’s just that some people really go out in style!

Remember when you were young and your parents told you to stop whining? Well, next time you’re tired and grumpy, try a different kind of ‘wine.’

Or this weekend, while you’re grabbing a beer with your buds or enjoying a martini at home, consider drinking wine instead.

New research shows that men who consume about half a glass of wine a day can expect to live almost five years longer than those who don’t—and 2.5 years longer than their friends who drink only beer or other liquor.

That’s enough to make a wino out of anyone! But remember: moderation is key.

While scientists have known for some time that phytochemicals—naturally occurring plant compounds found in wine—reduce the risk of heart disease, certain cancers and slow the progression of neurological degenerative disorders like Alzheimer’s and Parkinson’s Disease, a recent Dutch study revealed the true pot of gold at the end of the rainbow: sipping wine can help you live longer.

The study followed more than 1,100 middle-aged men over a 40-year period, examining diet, habits, overall health and the impact of drinking beer, liquor and wine.

Researchers investigated how much alcohol the men drank, the form in which it was consumed and for what period of time, and whether the men smoked or had any serious illnesses.

As it turns out, the wine drinkers in the group died at an average age of 77, as opposed to the normal average of 72.

Even when researchers factored in socioeconomic status, dietary factors and other lifestyle habits, the link between wine and longer life remained, a recent report in Reuters revealed.

Though researchers aren’t sure yet if these benefits extend to women, due to a difference in the way male and female bodies metabolize alcohol, here’s one female willing to take a chance! What have I got to lose?

For more information on ‘wining’ and dining for longer life, check out our article, “‘Wine’ a Little, Live Longer.” And while you’re out enjoying yourself this weekend, order a teaser of red wine at dinner. You’ll feel better and live longer.

Hat Tip to Reuters News & WebMD:

A Little Wine May Make for a Longer Life
Drinking a Little Wine Linked to Men’s Longer Life
Half a Glass of Wine for Longer Life?

Life insurance is an important  subject—too important for bad advice. And that’s why I’m going to take a couple minutes to unpack Suze Orman’s unwise counsel.

(For those of you without televisions, Suze Orman is an incredibly popular personal finance pundit and Oprah protégé.)

Too rigid
When answering the question, “How much life insurance should I get?” Orman resorts to a long-discredited formula of multiplying your salary by 20.

The Insurance Information Institute (III) calls this formula “simplistic” because it ignores inflation and other sources of income. The III outlines a scenario in which, at 3 percent annual inflation, Orman’s formula would leave a survivor with no money after 16 years.

Too arbitrary
Orman’s conclusion on the whole life vs. term life insurance debate matches our own, but her reasoning is suspect. She discourages consumers from buying whole life insurance merely because insurance agents make large commissions on such policies.

“While I agree with her that whole life insurance is a poor choice, her explanation for why kind of leaves a person wondering who in the world ever told her she could touch a microphone,” says Ed Hinerman, a life insurance  and blogger. “The reason whole life is a bad deal is that it mixes your family protection with investments … commission is not the issue!”

In other words, permanent life insurance is a bad investment strategy. While it will replace lost income in the event of the policyholder’s death, it will never be a cash cow while the insured is alive. We at InsureMe generally subscribe to this advice: ‘buy term and invest the difference.’

What’s more, Hinerman notes that you should buy a financial product because it’s the right product for you, not because it results in a large or small commission for the agent or broker. The commission is immaterial.

When it comes to life insurance, there’s no one-size-fits-all approach, despite what Orman would have you believe. The best way to find the right coverage is to talk to a licensed professional that you trust. He or she will look at your unique situation—your age, income, assets, number of dependents—and help you find the best policy.

Related:

• Life Insurance Rates Demystified
• 4 Things to Look for in a Life Insurance Company
• Life Insurance in 60 Seconds

It’s hard losing someone you love. But with the provision life insurance offers, the transition to a new life—though painful—can be a little bit easier.

What if, in an attempt to keep them safe, a beloved family member hides their life insurance documents in a “safe” place—and forgets to tell you where?

How can you read the provisions of the will and collect what you have coming if you can’t even find the policy in question?

Rather than storing them in a bank deposit box or other secure location, some people still choose to hide their insurance policies in less discriminate places: under floors, behind paintings, in old trunks, in safe deposit boxes under beds or even under mattresses. After all, we have to protect what we have, right?

The problem is, without written or verbal instructions of some sort leading to the hidden treasure, hidden policies tend to stay…well, hidden.

More than one-fourth of life insurance benefits are never claimed, experts say. That means a lot of people out there have resources at their disposal they aren’t even aware of.

If a loved one has died and you can’t find their life insurance policy, read our article “What to Do When a Life Insurance Policy Goes MIA.” You’ll find tips and strategies there to help you locate a policy that’s been lost.

In hard economic times, we can all use a little something extra to help carry us through. It may take a little digging to find it, but it’s well worth the time and effort.

Besides, who knows what that search might uncover?

While we’re on the subject of life insurance, have you ever taken a close look at your life insurance policy? Do you know what information it contains—or would you rather get hit by a Mack truck than read through your boring old insurance policy?

While life insurance certainly isn’t the most exciting subject to read or talk about, knowing what your loved ones will be up against when the time comes leaves little room for worry.

So dust off your policy’s jacket, lean back in your comfy chair, and take a look at what’s really inside. What you see there should look something like this:

• Declaration page. The first part of your policy, this section identifies who’s insured, the risks or perils covered, the policy’s face value (e.g. $25,000, $50,000, etc.) and the period of time the plan is in effect.
• Insuring agreement. States the types of losses paid by the insurer, the items the insurance company agrees to pay on your behalf and additional services provided by the insurer (e.g. lawsuit defense).
• Exclusions. Explains the risks, losses and situations your policy doesn’t cover.
• Conditions. Lists special qualifications, requirements or limitations (placed there by the insurance company) which, if not met, may cause your life insurance claim to be denied. Includes requirements like proof of loss (e.g. a death certificate) or failure to cooperate during the company’s investigation of death.
• Definitions. Defines specific insurance terms used in the policy. (If you hate “insuranceeze,” this part of your policy will make your life easier!)
• Endorsements and Riders. Written statements that add to, delete or modify the provisions in the insurance contract.

Now that you know what’s contained in your life insurance policy, check to see if it needs updating. If you’ve gotten married, divorced, had children or experienced another major life change since the policy was written, it may be time to add or amend your coverage.

P.S.—If you don’t have a copy of your life insurance contract, contact your insurance company to request one.

What goes into life insurance rates, anyway?

• Smoking status: Do you smoke? Good, because if did, you’d pay a whole lot more for life insurance. A whole lot more.
• Marital status – Singles pay less than married couples.
• Family size – Fewer dependents equal lower rates.
• Age – Life insurers are ageist—they prefer younger policy holders.
• Health – The healthy will pay less than the unhealthy, and many life insurance companies require a physical before issuing a policy. Our advice (which we’re working on heeding ourselves): More veggies and trips to the gym.
• Occupation – The school teacher will pay less than the lion tamer. The guy who juggles chain saws will pay more than the lion tamer. In other words, those with hazardous jobs pay more than office park Dilberts.

Another good way to save on life insurance is to shop around and compare rates.

1.High marks from independent rating agencies like Moody’s and A.M. Best. Because life insurance is a long-term investment that is *not* backed by the federal government, it’s important to do business with an insurer in sound financial condition. Click here to learn more about gauging the financial strength of a company.

2. No complaints. Each state regulates life insurance companies doing business within its borders and keeps records of consumer complaints. Click here to get a listing of state departments of insurance.

3. Good service. Life insurance can get complicated, so it pays to have an agent who has the time, inclination and integrity to explain things in a clear and unbiased way.

4. A product that suits your needs and fits your budget. A company may have all of the qualities listed above, but if it doesn’t have a product whose features match your needs, best to keep shopping.

With AIG (American International Group) on the brink of bankruptcy, a lot of nervous people are asking the following question: What if my insurance company goes bankrupt?

Get the answer over at the InsureMe Insurance Resource Center.

Major life insurance organizations, including the American Council of Life Insurers (ACLI), the Association for Advanced Life Underwriting (AALU) and the National Association of Insurance and Financial Advisors (NAIFA) plan to crack down on companies that pay elderly people to buy life insurance with the intention of selling the policies to investment groups, reports the Insurance News Network. And they’re calling for changes in state regulation to help curb the practice.

These types of life insurance transactions, called stranger-oriented life insurance, or STOLI, has in the past been a way for policyholders to receive payment for life insurance policies they no longer need. The problem, notes a recent press release from the National Organization of Life and Health Insurance Guaranty Associations (NOLHGA), comes when financial companies seek out people who are insurable but have short life expectancies and who agree ahead of time to sell their policies for a fee.

These kinds of transactions have been around since the 1990s, say the NOLHGA, traced back to AIDS patients who had life insurance policies but wanted access to cash funds while they were living.

A third party paid the insured person a portion of the face value of the policy, knowing that an AIDS diagnosis at that time meant an early death. The buyer paid the premiums and collected the benefit when the person died.

According to a recent press release by the ACLI (viewable here courtesy of the Insurance News Network), The NAIC Viatical Settlement Model Law was enacted in 1993 to govern the sale of life insurance policies by terminally ill policyholders to unrelated third parties. In recent years, however, loopholes in that model were “exploited” by investors and hedge funds to allow STOLI transactions.

The ACLI President and CEO Frank Keating called STOLI arrangements “contrived transactions which circumvent the intent of state insurable interest laws.” Other industry critics of STOLI say the arrangements do nothing to protect the insured’s family or estate. The National Association of Insurance Commissioners (NAIC) also says STOLI undermines the basic premise of life insurance: that a policy’s beneficiary has a “legitimate, insurable interest” in the policyholder’s good health.

The challenge for the life and health industry lies in trying to simultaneously prohibit STOLI while not obstructing consumer rights and legitimate life settlements. In 2007, expect to see NAIC working with individual state insurance departments to adopt changes in the aforementioned model law.

Read more about STOLI issues courtesy of the NOLHGA and the Insurance News Network here and here, respectively.

If you ask me, long-term care insurance is about as cringeworthy a topic as life insurance. Who wants to think about aging and regressing to a state where you need to be cared for 24/7? However, it’s worth a moment of discomfort as you muse what life might look like for you and your family if you don’t consider LTC insurance.

On average, a year of full-time care costs almost $60,000. After discovering you have no LTC insurance, your son or daughter decides to move you into his or her basement. You haven’t lost all your faculties, so you are acutely aware of the musky odor and odd noises. Because your family doesn’t want to leave you home alone and can’t afford to hire someone, they enlist the help of the garish, outspoken neighbor, Babs, who loves having someone to talk to while she watches her soaps. Your body may be failing you a bit, but your mind is not and you can’t bare her incessant chatter and patronizing nature. Each night as you fall asleep on your damp, basement cot, you dream about how your life might be different if you had purchased LTC insurance instead of that mid-life crisis Corvette.

A sort of hybrid between life and health insurance, LTC insurance enables your family to pay for any care you need. Your LTC insurance might cover your rent at an assisted living facility, the fee for adult day care or the expenses if a family member becomes your full-time caregiver. It will guarantee you a comfortable environment free of obnoxious neighbors and clammy basements.

Consider a few statistics courtesy of the Insurance Information Institute.

–11 percent of the individuals who applied for LTC insurance in their 50s, 19 percent in their 60s and 43 percent in their 70s were rejected.

–In 1999, about 160,000 of the people living in nursing homes were under age 65 (almost 10 percent of the total). Of those receiving home health care services, roughly 400,000 were under 65 (about 30 percent of the total).

–According to a report from the Kaiser Foundation, over five million people ages 18-64 need some type of long-term care in their lifetime.

If you expect to qualify for Medicaid by the time you’re 65, you should not purchase LTC insurance. The government program will subsidize the cost of care. Conversely, if your net worth is above 1.5 million, excluding your home, you can safely forego the LTC insurance as well.

But since the middle class makes up nearly 50 percent of the population, chances are you fall in between those two extremes, and might want to consider LTC insurance so your children or siblings aren’t saddled with the financial burden.

Links:

http://www.longtermcarelink.net/

http://www.medicare.gov/LongTermCare/Static/Home.asp

http://www.opm.gov/insure/ltc/

Gone are the days of Betty Freidan’s Feminine Mystique. Today, 61 percent of married women bring home a paycheck compared to only 23 percent in 1959. But on average, women still earn less than men, spend less time in the workforce and receive fewer retirement benefits.

Lower Total Earnings. Women earn an average of 73 cents on every dollar a man makes.

Less Time in the Workforce. It’s usually women who leave their jobs for extended periods to care for children or ailing parents.

Fewer Benefits. A Women’s Institute for a Secure Retirement (WISER) study reported women receive only 50 percent as much pension as their male counterparts.

Considering those disadvantages and that the average woman spends more of her life single than married, it reasons you should spend a little more time thinking about retirement regardless of your age.

…Read the rest of this entry »

A victim of my pop-culture obsessed society, I immediately noticed this press release, which sites a survey that asked Americans to select the T.V dad they think needs the most life-insurance coverage.

Who do you think needs more life insurance? Jersey mob boss Tony Soprano or Los Angeles architect Mike Brady? Dipsomaniac Homer J. Simpson or sports aficionado Ray Barone? And how does Clair’s lawyer salary affect the Huxtable’s life insurance needs? It kind of takes the fun out of television; but it raises the question, how do people determine their own life insurance needs?

As the survey reveals, many insurance consumers erroneously believe the amount of life insurance a person needs is proportionate to the degree of risk they face in their profession or hobbies. Although there is a greater likelihood that Tony Soprano will meet his untimely demise (after all, we are coming up on the final season of the Sopranos) than Mike Brady; risk of death is not the primary factor to consider when buying life insurance.

Insurers have developed complicated algorithms to gauge their risk to insure you. But, life is more unstable and fleeting than a mathematical formula can calculate. So, when deciding how much life insurance to purchase for your family, you may want to take a few factors into account, such as immediate expenses, ongoing needs and future expenses.

Check out the life insurance needs calculator provided by the non-profit LIFE Foundation.

An Insurance Information Institute (III) press release reports that life insurance premiums continue on a downward trend and will drop another 4 percent in 2007. That’s good news for all of you reassessing your life insurance needs after reading this post.

If you are contemplating a second policy for more coverage, think again. According to III, buying one large policy will save you more. Typically, $250,000, $500,000 and $1,000,000 policies qualify for rate reductions. And remember, a $500,000 death benefit only pays out $2500 per month for 17 years–not including a retirement program or other employer-paid benefits.

Below the belt question of the day: What’s more important–that $4 frappuccino in your hand or your child’s future?

David F. Woods, president of the non-profit Life and Health Insurance Foundation for Education (LIFE), poses this question to parents who are reluctant to buy life insurance because of cost concerns.

“When someone says they can’t afford life insurance they are saying they love things more than they love their family,” Woods wrote in a post on LIFE’s blog, The Insurance Word. “What would your family rather have in the event of your death - 365 empty Starbucks coffee cups or $500,000?”

In addition to Starbucks coffee, he lists gluttonous SUVs and flat-screen TVs among the things material goods that leave us unable (read: unwilling) to afford life insurance. Woods acknowledges that he “may” sound like he’s laying a guilt trip on his readers. [Not at all, Dave!]

“But it will only resonate as guilt if it’s true,” he says, twisting the blade a little. “I’m just giving you the 21st Century list of common excuses for not taking care of one’s family at their death. It’s not about affordability, it’s about priorities.”

I like Mr. Woods’ blunt delivery. It is about priorities. Sure, we all need transportation, escapes from reality and a.m. infusions of caffeine and sugar. But do we really need a Hummer to get to the office park, a flat screen TV to watch “CSI,” and caramel macchiato to wake up in the morning? Hardly! (Although that middle one is close.)

Woods is not suggesting you give up all material things and live in a hand-built cabin on a pond in the Massachusetts wilderness. The sacrifices he’s suggesting are pretty small (”How about giving up one movie ticket a week?”). Woods says a policy with a $500,000 death benefit can cost as little as a dollar a day.

His point: life insurance is affordable if it’s a priority.

Read the entire post here.

[Bonus]: Find out how much sugar and creamer is in a large–excuse me, venti–Starbucks Frappuccino here.

If you’re anything like me, you’ve gasped, laughed, shrieked, and cried over the Jackass crew. And with their second movie, Jackass: Number Two, hitting theaters this week, star Johnny Knoxville said the group had insurance on the brain this time around.

Knoxville et al. said they were certain they were going to die during the Jackass sequel, and therefore asked studio execs to shell out $7 million in insurance coverage to protect them. According to Starpulse.com, the precautions weren’t unwarrented–Knoxville said he nearly died during the soon-to-be-infamous rocket-launching stunt.

“When the rocket exploded in one stunt–there was like a foot-long metal rod that went right out next to my side. It was close!” said the Jackass star.

Director Jeff Tremain agreed, adding that when they watched the playback of the rocket stunt, the frame by frame footage showed the rocket casings shooting out the back and side, barely missing Knoxville’s torso. Tremain also explained how he went about asking the studio for the insurance money.

“The studio is like, well what do you need $7 million for? And I’m like well, you’ve got to insure these guys! You know. The tapes cost $7. The cameras are about $2,000. After that, it’s all insurance!”

Makes you wonder if said studio execs had ever watched five minutes of Jackass in their lives…or if they just leapt at the chance to invest in something that the kids would go crazy for. Otherwise, insurance would have been foremost on their minds.

So, before you attempt to wrestle an anaconda in a Chuck E. Cheese ball pit…contact the movie’s studio reps to find out who agreed to insure these jackasses pranksters.

[Source]: Exposay
[Hat tip]: The Insurance Coverage Blog

As far as commemorative months go, Life Insurance Awareness Month isn’t the most exciting. Miniseries about life insurance don’t interrupt scheduled programming and roads aren’t blocked for life insurance parades. Life insurance doesn’t get much play, probably because it addresses the dreaded issue of one’s mortality.

It’s a topic no one wants to think about, which is likely one reason why according to a consumer survey, one-third of U.S. adults lack life insurance entirely.

But life insurance isn’t about your death or your life. It is about your peace of mind, knowing your family will be financailly secure in your absence.

The main reason people purchase life insurance is to replace their lost income should they die. Obviously, if you have small children you’d want them to continue to live as comfortably as possible. However, life insurance isn’t just for the kids. It can protect the financial future of your siblings, aging parents, a domestic partner and adult children as well. An adequate life insurance policy can help pay for your funeral, burial, remaining medical expenses or debts. Although I’m sure VISA mourns the loss of a customer, they will still expect someone to pay off the plasma T.V.

Maybe you’re loaded and your heirs are sure to see some cash when you kick it, but if you’re like most people there won’t be much left over. A decent life insurance policy can create an inheritance for your family when you name them as beneficiaries. That can mean college funds for your children and no mortgage payments for your spouse.

Use your life insurance as an additional savings account while you’re alive. Permanent life insurance offers a cash value–you can actually accrue money through the life of your policy. Part of your payment goes toward the cost of the insurance, and the remainder is put in a tax-sheltered savings account. And you can borrow from it if money gets tight.

If I haven’t persuaded you to purchase life insurance, maybe Olympic Gold-Medalist Scott Hamilton can. In honor of Life Insurance Awareness Month, the Life and Health Insurance Foundation for Education has compiled several stories about how life insurance has helped families by easing their financially concerns in the wake of their loss.

Once you’re convinced, check out the Insurance Information Institute for tips on determining the amount you need, choosing a company and saving money on your policy.

Since it is life insurance awareness month, I figured I’d weigh in on the mother of all insurance debates: term life insurance v. cash value (also know as permanent) life insurance.

Disclaimer 1: Life insurance is complicated and doesn’t make for fun, lively blog posts. So if you’re getting ready to click away to more exciting fare (like Maribeth’s great post on insurance fraud), I’m not offended.

Before you go, though, you can quickly scan the two bullets below to get an idea of my biased and simplistic take on the debate between term life and cash value life insurance:

• If you’re going to hold on to your insurance forever–or at least longer than 15-20 years–then cash value/permanent might be a good pick.
• If you’re NOT going to hold on to your life insurance for that long, term life insurance is probably a better option than cash value/permanent life insurance.

…Read the rest of this entry »