GUARDING AGAINST THE FINANCIAL PITFALLS OF DEATH
or no expense to you. Others are best left alone because they are just a waste of money for you. One type of policy is most often used at businesses. As part of a benefits package, many employers will offer life insurance for their employees. This type of insurance is group life insurance because there is one master policy that covers many different people. Usually group life, when offered by an employer, is paid for solely by the employer, with the death benefits going to whomever the employee designates. Group life is almost always term insurance because of the lower costs. However, this kind of insurance doesn’t just have to come from an employer. Usually, any type of group, like a labor union, alumni organization, etc., can obtain a group life policy for those eligible members. Any type of group life insurance should be considered when you are looking at your life insurance needs.
Two other types of insurance are credit life and mortgage life. Credit life insurance is generally offered by banks, credit card com- panies, and other lenders. The premium for credit life is typically rather high, and is tacked onto your monthly bill. While the purpose for credit life is to pay off any outstanding debts to that particular lender, it is a waste of money. Any kind of insurance that you have, be it group life through your job, or a regular term or permanent pol- icy you have on your own, should cover your outstanding debts. Mortgage life insurance is another form of term insurance that would pay off your mortgage in the event that you died before the debt was repaid. As with credit life, the premium is usually pretty high and a waste of money. You would be better off shopping around for a regu- lar term or permanent policy.
DO I NEED LIFE INSURANCE?
This is a question I have faced a number of times when meeting with clients. Unfortunately, there is no pat answer for everyone. Whether you need insurance is determined by your individual situation. A good place to start is to look at the cash flow statement you prepared for yourself. How much money do you have coming in every month? How much is going out? If something were to happen to you, would your family, or heirs, have enough money to eradicate your debt and