Life insurance - Who Needs It?
Life insurance is an important component of a well-designed, long term financial plan. This is true whether you’re single or married, with or without children, whether you’re out on your own for the first time, or enjoying your middle years.
Many people get health insurance coverage through their employer, who may also make life insurance coverage available to their employees. Like the health insurance that is tied to employment, the life insurance coverage may end when you leave that employer. As such, it’s a smart decision to consider purchasing additional life insurance besides any employer-provided life insurance to help prevent a possible disruption.
Buying life insurance is one of those things many people put off for any number of reasons, a big one being the cost. The top reason given for not purchasing life insurance is that it is too expensive, but when asked about the cost of coverage, the median estimate given was more than three times the actual cost.1
Another reason people may procrastinate when it comes to purchasing life insurance is they don’t see a current need, and so they feel they can put it off until such a time as they think they need it: when they get married or when they have a child.3 This thinking is actually counterintuitive since age and health are the most important factors in determining the cost of life insurance. Unless you have found a way to age backwards (please share that information), life insurance will never be cheaper than at this point in your life. Just because you are healthy now is no guarantee for the future.
Currently, 73 percent of consumers leave more than $61, 500 of debt behind them when they die.2 Most of us would not intentionally put the financial wellbeing of our loved ones at risk, but without life insurance, that is a possibility regardless of your age or marital status or whether or not you’re a parent. Those we leave behind will be the ones left with the responsibility of paying for our final expenses plus other debt we may have accrued. Are you one of the millions of people left with student debt? Outstanding medical bills? Credit card debt? Do you have a mortgage? A business? Would your loved ones be able to take on your financial responsibilities? Life insurance can help ease the financial burden on your loved ones.
A dependent isn’t always a young child. Are you caring for an adult child with special needs? Are you caring for elderly parents? If your loved ones depend on your financial support for their livelihood, life insurance is a must because it can help replace your income when you die. You would also want to provide enough money to cover the costs of hiring someone to handle the day-to-day household tasks, like cleaning, laundry, cooking, childcare and anything else your loved ones may need.4
It goes without saying that those of us with children want to do everything in our power to help secure their future and set them up for success. In addition to helping to meet their everyday needs, many people set money aside to provide them with a good education. Life insurance can mean the difference between having college dreams come true and having to settle for less than you’d hoped for them.
Beyond paying for final expenses and helping loved ones maintain their lifestyle upon your passing, some people want to have money to leave as an inheritance … just because. People sometimes choose to make provisions to leave a monetary gift to someone who was helped them in some way. Some may want to leave a gift for someone to have an opportunity they might not have without it. Others may want to make a bequest to their college or an organization or charity. Life insurance can help bring these great intentions to life.
Knowing that your loved ones will be cared for when you are no longer here can contribute to your wellbeing now. Life insurance will never be cheaper than it is right now. Carpe diem! A licensed insurance agent can help you navigate your choices and build a plan according to your needs and budget.
Life Happens, 2019 Insurance Barometer Study (May 5, 2020)
Credit.com, Americans Are Dying With an Average of $62K of Debt (May 6, 2020)
Life Happens, 6 Reasons People Don’t Buy Life Insurance (and Why They’re Wrong) (May 22, 2020)
Nerd Wallet, Why Stay-at-Home Spouses Should Buy Life Insurance (May 22, 2020)
Categories: Insurance, Life Insurance