Knowlopedia
Valued Contributor
- Credits
- $0.37390
If you don't have life insurance through your employer and are considering whether to purchase it on your own, the answer is not always yes. It all depends on many factors, but in general if you're in reasonably good health and have a good family history of living long lives (e.g., grandparents who are alive and well), then the odds of passing away during the time period of a 20- or 30-year life insurance policy are low enough to justify going without it.
But there may still be benefits to purchasing life insurance on your own. So if you don't have the coverage through your employee, or it's not enough (or too much), and if you're still young enough to add another 10, 20 or 30 years to the policy and make it more affordable, here are some things to consider:
• If you have a spouse or significant other who has life insurance, they could take out a rider that would pay them a lump sum amount upon your death. Both of these options would transfer wealth from the surviving spouse's name into your estate. The idea is that the spouse could then use that money for themselves without liquidating their assets (like selling off investments and selling some property).
• If you don't have a spouse or significant other, then you can't transfer wealth to your estate in order to make the policy affordable. So if the premiums are too high and the market is still very competitive (even if it is possible that you would die sooner than expected), then it may be worth looking into taking out life insurance on your own. You'll pay higher rates, but potentially lower costs over a longer period of time.
• You can obtain a cheaper variable life insurance policy from a non-insurance company that offers less expensive rates and charges lower commissions, such as an online brokerage account (a discount brokerage will also provide this service).
But there may still be benefits to purchasing life insurance on your own. So if you don't have the coverage through your employee, or it's not enough (or too much), and if you're still young enough to add another 10, 20 or 30 years to the policy and make it more affordable, here are some things to consider:
• If you have a spouse or significant other who has life insurance, they could take out a rider that would pay them a lump sum amount upon your death. Both of these options would transfer wealth from the surviving spouse's name into your estate. The idea is that the spouse could then use that money for themselves without liquidating their assets (like selling off investments and selling some property).
• If you don't have a spouse or significant other, then you can't transfer wealth to your estate in order to make the policy affordable. So if the premiums are too high and the market is still very competitive (even if it is possible that you would die sooner than expected), then it may be worth looking into taking out life insurance on your own. You'll pay higher rates, but potentially lower costs over a longer period of time.
• You can obtain a cheaper variable life insurance policy from a non-insurance company that offers less expensive rates and charges lower commissions, such as an online brokerage account (a discount brokerage will also provide this service).
