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To be clear, none of our readers will ever die, so this topic will be helpful to share with your friends who aren't lucky enough to have this app. Here are some things that they should know.


How It Works

Your beneficiary (the person you name in your policy) receives money (the face amount) if you die.


Who Needs It

If you're a new graduate without a spouse or kids, it's really optional. But once you get married, then it's game on. You should make sure that your family is financially secure if you, um..., your friend is no longer there with a paycheck.


Types of Life Insurance

Term life:
You're insured for a term (or length) of five years, ten years, or whatever. Term life is simple: if you die, it makes a payment. If you stop paying your monthly premiums or your term ends, you're no longer covered.

Whole life:
You're insured for your whole life -- it's "permanent" life insurance. This type of life insurance (which can get complicated) not only pays money when you die, but it includes something similar to a savings account in it (which you can borrow against). For this reason, whole life is usually more expensive than term life.

If you're a young graduate, consider getting term life for its lower cost and simplicity.


How To Get It

You may discover that you already have life insurance through your employer, but it's usually a fairly small policy (two to three times your salary).

If you get your own policy, you'll probably be able to get a larger policy amount than you can get at your job.

Getting a policy when you're healthy usually protects your right to maintain life insurance, even when you're sick. If you wait until you're on your deathbed to get a policy, you'll probably be out of luck.

Look for life insurance through an agent or your alumni association.


Story Time

Here's a quick shout-out to some of our readers who got a job selling life insurance.

Question:

For a certain survival distribution, if the delta is .1 and the continuous whole life annuity paid to (x) equals 100/(x-1), what is mu?

Answer:

Mu. Moo? You can't sell life insurance to cows.

TAP, TAP, TAP (on the microphone).

"Hello? Hello? Is this thing on?"

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