Who Needs Life Insurance?

Bill asks who needs life insurance. Dave thinks term life insurance is the only kind you need, and he should get insurance.

QUESTION: Bill on Facebook asks who needs life insurance. Dave thinks term life insurance is the only kind you need, and he should get insurance.

ANSWER: Term life insurance is the only kind of life insurance you should ever buy. The other types of life insurances involve investing and have horrible rates of return, and when you die they keep your money. Those are horrible plans.

You should get term life insurance. Your wife and baby depend on your income. You should buy about 10 times your income, so if you make $50,000 a year, you should have a $500,000 policy. If you die, your wife can invest that money and, at a 10% return over time, can replace your income. With a new baby, you should have 20-year level term insurance.

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