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CHAPTER 3
Life Insurance Advantages and Disadvantages
Why Buy Life Insurance?
Life insurance. Bah. Who needs it? Well, that’s a good question—one that we each ask ourselves at some point along life’s journey. In a nutshell, determining whether to buy life insurance or not depends on your own situation. If you don’t have people that depend on you (such as a wife and kids or an elderly parent) and the income you bring home, then you probably don’t need life insurance. But if your salary is vital to supporting your loved ones, making the house payment, cover- ing other bills and sending your kids to college, then life insurance can cover these financial commitments should you pass away.
In this chapter we discuss how to determine if you need life insurance and how much coverage is appropriate. We also cover what types of life insurance policies are available and insurance terms and definitions to make understanding your policy a little easier.
How to Determine if You Need Life Insurance
Let’s face it. The unexpected death of a family member is devastating for survivors. All too often, the hardships are compounded by financial losses that could have been avoided with adequate life insurance. Such coverage can protect your loved ones against the financial hardships of your death by giving them the means to manage certain expenses. This cash (known as the death benefit) replaces your income and can help your family meet many important financial needs like daily living
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