moonlighting on another blog

I have written a piece for Rana Cash’s blog over at the AJC this week.

Happy Reading:  http://blogs.ajc.com/atlanta-bargain-hunter/2010/08/24/7437/

Applying for Life Insurance

No offense to insurance agents or dentists, but life insurance for most folks is about as exciting as a trip to the dentist.  It’s just not one of those subjects that many folks like to talk about or think about.  However, being an investment guy I figured after the last 12 months my life span had shortened considerably, so it was time.  In August, I decided to review my life insurance coverage and applied for a new policy.   My current term policy still had 15 years remaining, but I found that for just a little more each month I could double the benefit and start all over with a brand new 20 year term policy.

If you are wondering, no I did not run a financial plan on myself to determine the amount.  I have done enough of these things that I have a fairly good idea without the help of a computer program.  A general rule of thumb that floats around out there is 10 times your gross salary.  I would say that’s a pretty good start, but think about the liabilities and cashflow needs your family would need just to confirm. 

I won’t get into the debate over term vs. permanent policies here.  If you have a question feel free to post and I will answer.  My feeling is that in the high liability years you need lot’s of coverage and term policies serve that well.  It’s relatively inexpensive and you get a lot of coverage for the premium.  Statistically the insurance company knows that most folks will never keep the policies through full term and they just get to keep the premium money.  It’s a cash cow business model.  I am 40 and more than likely I will live past 60 (barring another market meltdown).  If so the insurance company pockets a lot of cash from me.  However, just like the reason I  keep Homeowners coverage in case my home catches fire, the life insurance is there in the event my time is up early. 

So for all you out there with lot’s of liabilities (ie: family) get life ins. coverage!