Once upon a time there were three sickly pigs.
Make that two. To pay for Pig 1s funeral, Pig 2 had to use her penicillin moneyand
then she died. Now Pig 3 was stuck with Pig 2s student loans because he was the co-signer.
This new burden left Pig 3 so poor that he lost his house to the Foreclosure Wolf and
had to raid his piglets college savings fund. Then Pig 3 died, and his piglets were
forced to move into an abandoned microwave.
Life Insurance would have helped those pigs. Life insurance pays cash when you die. You
buy it to protect those close to you from your debts, and to replace income that they
would lose in your absence. There are two categories of life insurance:
term life and permanent life.
Both types provide a cash payout upon your death. Permanent life
combines that with investment features, so the policy accumulates a cash value. For that
reason, term life is much cheaper than permanent life. Its also much simpler.
The other big difference? Term covers you
for a specific amount of time. Usually between 10 and 30 years. Permanent covers your whole
life, so long as you pay the premiums. For the vast majority of people, a good rule of thumb
is to keep your investments somewhere else and stick to basic term life insurance.
Remember! You dont necessarily need life
insurance for your whole life. Its all about covering your financial obligations. For example, if youre young and have a
co-signer on your student loans, have term insurance until youve paid them off. If
you have kids, buy a policy that covers you until theyre adults.
And so on. To recap: here are some tips to make shopping
for life insurance easier. Choose a term policy for basic life insurance
protection. Add up your current obligations, then only
buy that much insurance.
Be sure to shop around because prices can
vary. The moral of this story? Don't end up like
the three sickly pigs–buy life insurance..