Do I Need Life Insurance?
To answer this question, it’s important to really examine how life insurance could help your family. Life insurance is actually one of the most important financial planning decisions you can make during your lifetime. Instead of thinking about the monetary value of life insurance, think about what a life insurance payout could mean for your family should you pass away unexpectedly. You will quickly understand that it translates to security and peace of mind.
Life insurance provides a financial umbrella that protects and provides for your loved ones during an incredibly difficult time in their lives. The life insurance death benefit can give them the money they need to pay off the mortgage on their family home, cover debts, provide for day-to-day expenses, and even pay for long-term plans such as college costs. Life insurance is about more than money; it’s a simple way to provide for your family when you’re not around to do so. So why do people need life insurance? Put simply, to protect loved ones who would suffer financially without you.
Who Needs Life Insurance? The Majority of Adults!
It can be easy to think that only people with young dependents should maintain an active life insurance policy. There are many people who could benefit from life insurance coverage. In fact, most adults need to have affordable life insurance to protect their family from loss-of-life costs and to provide for their future. No matter your age, your marital status or parental status, insurance is an important safety measure to consider for you and your family’s financial future. Think about how your unexpected death could put a financial strain on your family; it could be as simple as finding the funds to pay for funeral costs or to cover bigger expenses such as paying off debts. Identifying how you provide for your family now and what you’d like to provide for them in the future is the best way to see how life insurance could help your family.
Life insurance protects your family from having to find the money to cover your end-of-life expenses such as funeral costs and replacing your income. To help you visualize what life insurance benefits your family could experience, we’ve created a range of detailed life scenarios below to show how the payout of life insurance coverage could be a valuable resource – regardless of your current life circumstances.
Identify Your Needs and Find the Best Insurance Policy
Your coverage needs are unique and can be influenced by your income, living situation, dependents, debts, and dreams. The guides below are designed to help you think about what life insurance could bring to your loved ones who need life insurance to provide long-term protection for their family. Review the following scenarios to determine your need for coverage:
Most single people typically do not consider the need of insurance coverage unless they are providing financial support for their family, or they have significant debt they are reluctant to pass on to their family members. If you have loved ones who depend on you financially, an insurance policy is necessary to secure their financial future in the event of an unexpected health issue or accident. And, if you have plans for marriage or starting a family, then buying life insurance at an early age is much more affordable and allows a coverage base for your future.
Single people should take the potential of deteriorating health and other sudden unforeseen afflictions into consideration when determining whether or not an insurance policy is necessary for their specific situation. The knowledge that incurred debt would end up being taken on by your loved ones, should also prompt single individuals to seek coverage to protect their family.
Married couples - with or without children - often find that having a policy in place is necessary to protect what they have worked for and so they can continue to provide for their loved ones in the future. For richer, for poorer, in sickness and in health, insurance is a necessary part of any financial plan. It is possible that your family's future would alter with the sudden death of a loved one, and it's important to plan for unforeseen situations that may affect you or your loved ones' financial stability.
It is important that married couples ask themselves the following questions when determining their need for coverage:
Would your spouse's income alone provide support for ongoing living expenses?
Would your financial plans for the future be realized or diminished by your untimely death?
Would your spouse be able to cover your final expenses? (e.g., funeral costs, medical bills, taxes, household or business debts, legal fees etc.?)
You and your spouse may decide that being a stay-at-home parent is an attractive option. However, providing around-the-clock childcare and managing the day-to-day household activities equates to valuable services that in the event of your death would otherwise require added financial costs. Your life insurance coverage ensures that your family will be able to have childcare and household management if you are taken from them.
Raising a family on your own, as a single parent, requires you to be twice as responsible for your family's wellbeing. Your day-to-day responsibility is to ensure that the kids are healthy, happy and performing well in school. Your long-range goals for them may include paying for college and any unexpected medical bills. This is when insurance becomes a necessary resource to rely on. It allows your family to maintain all its advantages throughout their lifetime without compromising the day-to-day care provided to them today.
When you are your own boss, you need to be responsible for a number of things. One of those concerns is how to protect your business in the event of your death, the death of one of your business partner, or key employees. There are many different policies that can benefit business owners, for example:
A buy-sell agreement ensures that the remaining business owners have the funds to buy the company interests of a deceased owner at a previously agreed upon price. The owners assume the business interests/shares and the family gets the financial proceeds from the buy-out.
It is important to prepare for retirement by ensuring that everything regarding your estate is in order. Peace of mind during your retirement allows you to enjoy all the sacrifices you have made in order to reach your golden year goals. You may wish to leave your hard-earned legacy for your family behind. A life insurance policy allows your family to take care of estate taxes, final expenses, and other debts down the road. Additionally, the proceeds are generally income tax-free and can be structured to avoid probate, mitigating further estate tax liability.
There may be a sense of financial freedom when you reach the stage in life when your children have moved away and are supporting themselves. You may even own your home, free and clear of any mortgage payments. This is the time when you are looking forward to your nearing retirement. Although you are in a positive and exciting stage in life, there are compelling reasons for you to seek added coverage. Not only does a good insurance policy provide for unexpected medical bills, but it also provides financial support when a spouse passes away suddenly. A family's retirement plan savings and social security may not always cover living expenses to accommodate your surviving spouse and dependents for the next 10, 20 or even 30 years.
There are insurance policies available for adults at any stage of life. Be aware, the earlier in life that you purchase coverage, the lower your insurance rates will be. For those considering if carrying a policy is necessary at their current stage in life, remember it is best to purchase your policy as a young adult to lock in lower premium rates for the term of your policy. The low rate stays the same for the duration of the term, even if your health declines during your term of coverage. Don’t wait any longer, learn about the different types of coverage, including whole and term insurance and get a quote today!
Not sure what life insurance coverage best fits your needs? We can help! IntelliQuote® compares quotes from only the best-rated insurance companies to help you find affordable coverage to protect your loved ones. Use our online quoting service to find the coverage you need today.
This information may help you analyze your financial needs. It is based on information and assumptions provided by you regarding your goals, expectations and financial situation. The calculations do not infer that the company assumes any fiduciary duties. The calculations provided should not be construed as financial, legal or tax advice. In addition, such information should not be relied upon as the only source of information. This information is supplied from sources we believe to be reliable but we cannot guarantee its accuracy. Hypothetical illustrations may provide historical or current performance information. Past performance does not guarantee nor indicate future results.