Is it important, something you definitely need or is just some profit for the insurance company like the banks?
Do I place my life into the hands of banks if I apply for life insurance?
What do I gain by applying for it?
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If you have small children, yes. If you hate your family, the answer is still yes but buy a long-lived parrot and make it the benefactor.
You gain nothing by applying for it but if you die your family at least has something to fall back on. There are however some insurance companies out there that will fight tooth and nail to not make that payout. Others will pay you instantly. Research.
If you have a family. I'd recommend it.
Dave Ramsey says short term insurance is the best way to go. https://www.fool.com/the-ascent/insurance/life/articles/dave-ramsey-says-you-need-this-much-life-insurance/
We all die, and not even dying is free. Personally I think it's worth it because upon death they freeze all bank accounts tied to you so your spouse and kids may be lacking funds. I'm no expert though...everything is a money maker for the banks, even your death.
I know someone who’s a multimillionaire from selling life insurance.
Like investing in the stock market...depends on if you're still living in the illusion
I've been in life ins for 25 years...
If you have a family, there is not excuse not to have it. It's not free to bury you. Term is fine. If you can afford it, permanent would be better because it does not expire unless you quit paying for it. But, most term plans have a product that you can convert the term to at the end of the term that is a permanent plan. The best policy to have is the one that's inforce when you need it, no matter the product.
You want to buy enough to pay off your debts as well as provide income to your survivors. A general rule of thumb is 10 times your annual income.
Unfortunately, there are some scammers in this business but most are not. I would advise not going to a State Farm, Allstate, Farmers or any other carrier company. Find an independent agent that can get you the best rate.
I'm happy to answer any questions you have..
Outside of a couple of decent responses, a lot of misinformation in the thread. First of all, insurance is risk transfer. You transfer the risk of financial loss from yourself to an insurer by paying a premium based on several factors: actuarial, expenses, investment returns and premium taxes.
Life insurance is primarily used to offset the risk of premature loss of income due to death, especially in the prime earning years, of the insured. Generally, the older you are, the less coverage you will qualify for.
It is a very complicated concept and you are probably best off consulting a qualified financial planner as the life purchase fits into other multiple facets of a person or families financial planning. There is no simple, one size answer to “should I buy life insurance?”
It's betting against yourself. If you have no faith in your ability to stay alive and provide for your family it's a good bet.
Nobody can guarantee that. Not to yourself or your family. I hate my big L I premium. But not as much as I hate the thought of leaving nothing. Please get Whole Life, not term. If you settle for term life the day will come when you realize you made a big mistake.
Guarantee what? It's a gamble like I said, and you're a dumbass. Definitely buy the insurance.
If you are young, get it
If you have any debt AND someone you want to leave $ or property to, get it
If you have a family, get it
If its offered through work, get it
As a rule of thumb, companies with higher S&P and Moody's ratings are a lot more solvent, and hence better to go with. Dont chase the lowest rate if its only a few dollars, not worth it in the end.
Term is probably the best bang for ur buck, whole/universal life r kinda bad investments, variable can be good but its also kinda expensive
It's a tool you can wield, it's also a way to scam people who are financially unsophisticated... so good on you for asking.
Things to know:
There are legitimate financial companies with large brands who make money through arbitraging markets at scale.
There are MLM companies that over inflate payments on sketchy products to earn commission down to the "agent" level.
There is "Term" Life insurance which defines a period in which you are covered, 20 years is common.
There are "Whole Life" policies which put the payments into a fund you can get back if you survive long enough.
There are Accidental Death and Dismemberment (AD+D) policies that only cover accidents etc, these are much less expensive.
When DOES it make sense?
You have a wife, kids, and a mortgage and without your income they're in trouble.
You don't want to leave a bill for whoever has to bury you.
When does it NOT make sense?
If you have no dependents and/or have enough assets that everything is already covered, or you just really don't like whoever will have to clean up your mess.
Whole vs. Term
Since everyone is going to die, how do insurance companies make anything on whole life? Exactly. Whole life is a scam... it works by suckering people into higher payments with the notion they can get that money back if they want it. What's being robbed here is the time-value of that money.
Term is meant to be used as a tool, which insurance is, where you define the period in which you can't self insure. By having a lower payment, you've freed cash to accumulate other assets.