Last week, I answered a question on LinkedIn for someone who was trying to understand different options when it comes to life insurance. You can see the question at this link:
http://www.linkedin.com/answers/personal-finance/individual-insurance/PFI_IVI/555735-34173662
The basic premise is that she wanted to leave some money to her children and was trying to decide between term and permanent insurance. But her question also raised issues of fairness and various estate considerations.
It’s a common enough question.
But what really got me thinking is that she wanted to learn more about both insurance and estate planning so that she can then get the insurance and set up trusts herself.
So this really got me thinking – while I am all for people gaining knowledge, is this something that people should really do themselves? If she got this right, then she saves herself a lot of money by not having to deal with attorneys and financial professionals.
On the other hand, if she got it wrong, it could be a real train wreck. As the saying goes, the road to ruin is paved with good intentions.
Do people care? If it was wrong, it wouldn’t affect her because she would be dead. Her heirs would have to deal with any issues.
More broadly, do people really care about general financial issues? Prior blog posts have discussed taxes and opportunity costs but do people really care that they could do better than simply following advice out of some magazine or what they hear from co-workers at the water cooler?
Are DIY kits the way to go? What are your thoughts?
Answer to last week’s trivia question: D – 47%.
This week’s trivia question: Even with all of the stimulus spending, what percentage of the FY 2009 US federal government budget is allocated to mandatory programs, such as Social Security, Medicare and Medicaid. Is it?
A – 5%
B – 22%
C – 37%
D – 52%
