How Do You Know When You Need Life Insurance?



Life insurance is one of those things that consumers know they should buy, but it seems a bit frightening. Mainly because it’s facing something that some prefer not to face.

There’s just no getting around it, thinking about life insurance is like planning your own funeral. In a sense, life insurance is just another bill that needs to be paid. Unfortunately, you won’t be around when things are divvied out, according to the way life insurance works.

Even though life insurance is not something to celebrate, much less talk about, it is an important part of many individuals’ financial plan. As long as you pay the premiums, the insurance company will pay the death benefit to your beneficiaries upon your demise.

A life insurance policy is foolproof. It is the one thing in life that “will” work out, since everyone will pass away. As harsh as that sounds, it’s not abnormal. Hundreds of thousands of people die each day, so it’s not uncommon. What may be uncommon is the number of people who are not prepared when they die, leaving those who depended upon them penniless. The peace of mind you feel from owning a life insurance policy may be hard to reckon with; however, the satisfaction is in knowing that your loved ones will be taken care of when you are deceased. 

How do you know when you need Life Insurance?

When you die, the people that are dependent on your financial support will be out of an income. So a life insurance policy will help cover all or some of that loss depending on the type of policy you have selected. Life insurance can be beneficial even if you have no dependents as a way of covering funeral expenses. Here are a few markers to help you decide if life insurance is something you need right now

New Families

If you are starting a family, life insurance is a good idea. Your rates will be less now than when you are older. Moreover, your future children will benefit as well. Understand family finances after the addition of a family member and plan accordingly.

Settled Families

If you have a family now, you need life insurance at once. This is not only for the spouse or partner employed outside the home; it also includes the person working inside the home. The cost of carrying on the family expenses can cause significant financial problems for surviving members. 

Young and Single

The reason why a young single adult would normally need life insurance is to pay their own funeral expenses, to support an elderly parent, or someone else financially. However, if you have other finances for a funeral and no other person is dependent on your income, then life insurance is not important.

Childless Working Couples

Both individuals in this situation would have to decide if they want life insurance. If each person is earning an income and feels comfortable continuing on their own if their partner passes away, then life insurance is not essential except if they needed it to cover funeral costs.

However, in some instances, one half of a working couple adds more to the earnings of the household or want to leave their partner in a better financial situation, then life insurance can be an option as long as it would not be a financial burden. Term life insurance would probably be the best choice.

Elderly

If you have no one depending on your income for support, life insurance during this time of life would not be necessary, unless you require money for funeral expenses. However, keep in mind that purchasing life insurance when you are older can be quite expensive. Prior to purchasing a life insurance policy, check with a financial advisor or accountant about ways that you can save for your funeral before considering life insurance. 

Life Insurance is Simple with the Proper Planning

With the proper planning and knowledge of how life insurance can fit into your plans; it is one of the simpler things to manage. You find life insurance rates and select a plan; pay the premiums, and those dependent on you are taken care of in the event of your death. Not having life insurance is not something impossible to remedy.