The following is my answer to a Quora
question: “At
what net worth should I start looking at buying additional life insurance
policies?”
This really depends on many factors. You need to take a look at your existing
coverage, and your current financial obligations and liabilities. From decide, you need to decide if, in the
event of your untimely demise, whether that coverage is sufficient to cover all
your obligations and liabilities. Assuming
you have a spouse and dependents, how long will it take for your spouse and the
family to adjust their lifestyle, and how drastic is that change?
Aside from death, critical illness and
disability actually cost more. Death is
a one-time event. But a disabled or
critically ill you may mean that the family loses more than just your income. Someone might have to quit to look after you. Adjustments may need to be done to your home. You will linger on, a burden for years before
death. This is why you need critical
illness and disability coverage.
In essence, as long as you feel you can
afford it, and there are viable options, take that additional coverage. It gets more expensive as you get older due to
the increased mortality charges.
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