Do I need Life Insurance?
Most people need life insurance. If you are on the fence about whether you are one of those people, think about the worst case scenario. If you died tomorrow would the people you care about be able to get by financially? Would they be able to pay the rent or mortgage or even bury you without being strained financially? If you are married, would your spouse be able to get by without your income? Read the scenarios below and figure out which category you belong to.
You’re single
Being single; you may or may not need insurance because you may not have anyone who depends on you financially. But like most things, there are exceptions to this rule. If you happen to be taking care of sickly or aging parents or siblings, you may want a life insurance policy on yourself that makes provisions for this. Another thing to note is that just because you’re single now, you may not always stay that way. Insurance is much easier and cheaper to attain when you’re young. You will get the best rates and you can lock in that coverage now. When you get older it may be harder to qualify because you may have health issues.
You’re a single parent
When you are a single parent you wear every hat. You are the breadwinner, chauffeur, cook, housekeeper, and a whole host of other things. The job never ends. You are your child’s everything. That’s a heavy burden to shoulder. You are essentially doing the job of two people. More than any other demographic, you need to make sure you make provisions for your children’s future.
You’re a Stay at Home Parent
Even though you may not be engaged in the work force you still make a financial contribution to your family. Driving children around, cooking, cleaning, attending PTA meetings and soccer games are important tasks. Think about how much money it would cost if your spouse had to hire someone to do all of those things! Life insurance helps you ensure your family can afford to maintain the life they are currently accustomed to.
You’re Married
When you get married you share everything with your partner. Your financial obligations get lumped into that as well. If one of you were to die prematurely, would the surviving spouse be able to pay off debts like car loans and credit cards and still keep a roof over their head? Also, if you are planning on starting a family, having a life insurance plan in place is one of the most prudent things you can do because some insurance companies wont issue a policy to a woman during her pregnancy because during a pregnancy complications can arise that would make it more risky to insure the mom to be.
You’re married with children
If you are a two income household like many households, the sudden death of you or your spouse could make it impossible for your family to maintain their same standard of living.
You’re children are grown and out of the house
Maybe your children are out of college and financially self sufficient and you are looking forward to retiring comfortably on your savings and social security. There is still a good chance that you or your spouse may outlive one another. Without life insurance, would your spouse be able to get by and live they way the currently live now? What about your grandchildren? Would you be able to leave a financial legacy for them?
You’re a small business owner
If you or one of your key employees were to suddenly pass away tomorrow, what would happen to your business? Key person insurance made payable to the company will allow owners the financial means to hire a replacement or buy company interests of the deceased at an agreed upon price.
You’re retired
Depending on the size of your estate, your heirs could be liable for making a large estate tax payment after you die. (Possibly 45% of your estate) The money paid out from a life insurance policy is paid out immediately giving heirs the opportunity to pay estate taxes, and final expenses with a minimum of hassle. Life insurance proceeds are usually tax free and can be set up to avoid probate.