First, consider getting a term policy, which only stays in force for a specific number of years. These tend to be a lot cheaper than permanent policies like whole life and universal life. Another way to keep the cost down is to buy only as much life insurance as you need. There are a couple of ways to figure this out.
A different and perhaps more useful approach is to tally up all the expenses your spouse would incur if something happened to you. Think childcare fees, grocery bills, mortgage and car payments, tuition, and so on.
Then subtract whatever you have in savings and investment accounts. Your policy should cover the difference. The fact is, any insurance is better than no insurance if you have dependents. Once your kids reach adulthood and financial independence, you might be able to start dialing back on life insurance.
That doesn't necessarily mean dropping your coverage altogether. If your existing term policy is coming to an end, one option is to take out a smaller policy that provides a safety net during your empty nest period.
Or if your current term coverage includes a conversion feature , you could turn a portion of it into a permanent life policy. Health insurance is designed to pay for medical treatment, drugs, and preventative check-ups for you and others covered under your plan. Life insurance provides a cash sum to your loved ones if you die during the length of the policy. There's no one-size-fits-all answer. If you still have a lot of outstanding debt obligations like a mortgage or have children or a spouse that is dependent on you, keeping life insurance is a good idea.
If you have considerable assets—enough to trigger estate taxes— life insurance placed in an irrevocable trust might be a way to get money out of your estate. Yes, it's generally a good idea to have some health insurance even if you're young and relatively healthy—at the very least, for catastrophic events.
Accidents and severe illnesses can strike anyone, and even a brief emergency room visit or an outpatient surgical procedure can cost hundreds or thousands of dollars. Without health coverage, you're responsible for all of those expenses.
While it's becoming rarer, some providers and ERs will turn you away if you're uninsured. When you only buy the coverage you truly need, paying for health and life insurance simultaneously becomes a lot less daunting.
Those of you age 30 and younger who don't suffer from chronic illness may be able to get by without the latter. House of Representatives. Centers for Medicare and Medicaid Services. See If You'll Owe a Fee. Congressional Research Service. Accessed Oct. National Conference of State Legislatures. Health Insurance. Life Insurance.
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