We all are concerned with leaving our loved ones behind with no financial assistance. There are many life insurance policies to sign up for and once you step into the insurance office, every one of them seems like a good choice. However, you should be leery of the investment choices. Are they really a good investment or a waste of your money that could be invested elsewhere?
Here are 4 life investments that you might not need.
Children Life Insurance
Generally speaking, life insurance is to cover the burden of last expenses for a person. The primary income provider is generally the one who has to have a life insurance policy. We expect our children to live long, healthy lives. It’s true that any unfortunate even can happen, but that child is not the income provider for the home, at least in most cases. The money used for their insurance policy would be best in a savings account or college savings plan, such as a 529 savings account.
Annuities are meant for wealthy people. It’s a lot of money to invest for the sake of having a fixed income. In addition, if something may arise where you need the funds prior to your retirement payout, you are only entitled to what you put into the account, not any of the growth. It’s better to invest your money into a general stock market portfolio such as with an IRA plan.
Term Life Insurance
The term life insurance policies are set up for an individual to make monthly payments for a specified term, such as 5, 10, or 15 years. Term policies target young adults with families. The policy will pay a lump sum to the deceased family members if they died within that term period. If the policy lapses, there is no payment. So an individual could invest hundreds to thousands of dollars in a 10 year term policy at the age of 30. If they live past 40 and let the policy end, they will have gained no benefit. It’s a better option to put that money into an investment account to let the savings grow and use it for their retirement funds.
Travel and Accident Insurance
Travel and accident insurance pays out in the event you die while away from home while traveling. The chances are so minimal though. A general life insurance plan will cover you in most situations, including dying while traveling. If you’re concerned and are really looking for the additional money for your family, simply bump up your current insurance policy.