Contrary to advice so generously offered by salesmen on the radio, not everyone needs life insurance.  Many intelligent people often fail to consider the wisdom of paying for insurance that is either unneeded or too much of a financial burden.  Before purchasing any insurance policy consider the test used by professional risk management consultants; to determine if an event is insurable ask the following questions:

1. Is the event being insured against rare and random?
2. If the event were to occur, would it be financially devastating?
3. Is the premium affordable?

In the case of life insurance, consider what it is you are insuring.  If you were to die, those that depend on you would lose your support.  How much is that support worth?  Remember, you are not trying to make your family wealthy by dieing; life insurance is an attempt to ensure that your death won’t be a burden. 

How much insurance do you need?  First calculate how much your family will need when you’re gone, deduct any assets (Retirement and Savings Accounts) from the amount and you’re left with a dollar figure of insurance to shop for.  The amount of life insurance needed should decrease as a family matures.  As savings and retirement accounts grow, less insurance is needed; by the time retirement rolls around life insurance policies may be allowed to expire.

You can probably save a sizable amount of money in premiums by shopping around for the best price among highly rated companies.  Remember, the difference in premiums adds up quickly over the years.  Many insurance companies give agents an incentive to quote much higher than the minimum premiums a company is willing to accept.  For example, a brokerage commission may be 50% of the minimum premium; and if the agent can sell a policy with a higher premium he may earn 85% of the additional amount.  It does not hurt to shop around. Whole, permanent, or return-of-premium policies are generally obsolete as prices on term life have become extremely competitive.

Avoid giving out any personal information.  An agent will need your age, gender, and answers to some generic health questions to give you a quote, but that is all.

If you have any health problems or a family history of them, finding affordable life insurance will be difficult.  Find an agent who is experienced helping people in your situation.

If an insurance company will sell you insurance the odds are incredibly high that the insurance will never be used.  Hence the obvious question, is paying for unneeded life insurance a bet placed against your own life?

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