Why do people buy life insurance? Question | Cheap auto insurance ...

Why do people buy life insurance?

What groups of people buy life insurance? Why do they buy it?

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There?s many reasons why people buy life insurance, but many buy it for the wrong reasons. Here are some of the wrong reasons to buy life insurance:
1) To save for retirement (you can do that with IRAs and 401(k))
2) To save for kid?s education (you can do that with Coverdell, 529 plans, or opening a UGMA account)
3) To save for down payment of a home or car (your savings account or money market account can achieve this)
4) Having ability to borrow your own money at a low interest rate (don?t this sound like a scam to you? But its legal since its in the contract)
5) To be insured for the rest of your life (I don?t know about you, but I don?t want to pay for life insurance when I?m retired)

Here are some good reasons to buy it:
1) To protect your income
2) To pay off the mortgage and other debts in case you die
3) To pay for funeral cost

Its quite common that life insurance agents and financial advisors will sell people on the idea of having life insurance and savings together. Its 2 products in one. But the sad truth about these life insurance products that build these so-called ?savings? is that you can only get one of the product back. If you die, you lose the savings. If you cancel the policy, you get the savings (minus surrender charges), but you lose coverage.

If people truly know everything about life insurance and how they work, every single one of them will buy term insurance. But most people are not going to spend time to research these products. So I created this blog that has all the information about the different types of life insurance: http://finance1o1.blogspot.com
The term health insurance is generally used to describe a form of insurance that pays for medical expenses. It is sometimes used more broadly to include insurance covering disability or long-term nursing or custodial care needs. It may be provided through a government-sponsored social insurance program, or from private insurance companies. It may be purchased on a group basis (e.g., by a firm to cover its employees) or purchased by individual consumers. In each case, the covered groups or individuals pay premiums or taxes to help protect themselves from high or unexpected healthcare expenses. Similar benefits paying for medical expenses may also be provided through social welfare programs funded by the government.
by james mMember since:May 23, 2008Total points:8,374 (Level 5)Add Contact
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One of three reasons:

1. People buy life insurance because they love someone else, and don?t want to see the person, or persons they love suffer financially in the event of their untimely death.

2. To protect a business partner from loss with a buy-sell agreement, funded by life insurance.

3. Some people buy life insurance in order to leave a legacy to a favorite church or charity.

Smart people buy life insurance! Those who are not so smart don?t!

Source(s):

Retired agent
3 years ago
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Source: http://www.decadesilove.com/2012/07/25/why-do-people-buy-life-insurance-question/

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