Kevin McCormally: I am Kevin McCormally of Kiplinger's and I am here with Janet Bodnar, the Deputy Editor of Kiplinger's Personal Finance Magazine. We are talking about Life Insurance. Janet, we have always hear a lot about Life Insurance, does everybody need Life Insurance?
Janet Bodnar: No Kevin, everyone doesn't need Life Insurance. If you are single, you almost certainly don't need Life Insurance. You really only need life insurance if someone is financially dependent on your income and that generally happens when you are married and you have children and that is the time when you definitely do need Life Insurance coverage.
Kevin McCormally: Okay, so how much do I need?
Janet Bodnar: Good rule of thumb is 5-10 times your annual incomes with the difference. Let's say eight times your annual income. If you want to get a more specific reading on how much you need, you can use a calculator like we have at the kiplinger.com website which can tell you how much you actually need, giving your specific circumstances.
Kevin McCormally: That's great, now what kind of insurance should I buy, term or whole life?
Janet Bodnar: I think for most people term insurance is the better deal and especially because term insurance rates have been falling for years. They are still falling, you can get a 20 or 30 year term life policy which is all, most families really need. For perhaps, it's little as several hundred dollars a year buying all the coverage that you need.
Kevin McCOrmally: Now a 20 year term policy, does that keep a steady premium through the entire 20 years?
Janet Bodnar: Yes, it would keep a steady premium through the entire term of the policy, that's really one of the reasons for buying it because you know what you will be paying each year.
Kevin McCormally: Okay, if prices have been falling down in the Insurance market. If I have insurance now should I have be re-shopping my policy?
Janet Bodnar: Yes, you definitely should be because it can. Even if you have just purchased a policy within the last couple of years, it's quite likely that rates have gone down even further. So if you can see, depending on what your age is and what your health situation is you may very well be able to get it at better deal.
Kevin McCormally: Are going to be good place to shop online?
Janet Bodnar: Yes, there are many sites to shop online, some of our favorites at Kiplinger's would be insure.com, or accuquote.com, another good site is insweb.com, we like those sites and we think other people will also.
Kevin McCormally: Okay Janet, thank you very much.
