8.6 Life Insurance

Notes

Life insurance pays money to beneficiaries if the insured person dies. It matters most for people with others who depend on their income.

• Term life covers a set number of years and usually costs less. Whole life lasts a lifetime and builds cash value, but costs more.
• Younger and healthier buyers usually pay lower premiums.
• Example: a 20-year term policy costing $30 a month has premiums of $30 \times 12 \times 20 = 7200$, so $7,200 in total.
• A single person with no dependents may not need much life insurance.
• Name beneficiaries and keep them updated.