Everyone loves buying life insurance! Wrong. We hate it. We view it as an expense each month. It is annoying. We have to die for anyone to see that money. However, life insurance can be an important part of preparing for future financial security and we can’t afford to overlook it.
In the event of a death, it can provide the safety needed for those left behind. Without it, loved ones are often left to struggle with the funeral costs and financial obligations that must be fulfilled.
Yet studies indicate that many households are currently without life insurance. In fact, a 2012 consumer study conducted by LIMRA, suggests 35 million households have no policy, and those who do say that they do not have enough.
Death is a topic few people wish to discuss. However, while many recognize the need for life insurance policy, they put it off because it conflicts with other financial responsibilities, or they believe they have plenty of time to worry about it later. Many others question if it is even necessary. So how do you know if you need life insurance?
The first thing to consider when answering this question is whether there are dependents involved. If you have a child or a spouse that is financially dependent on you, then life insurance is necessary. Whether married with children or a single parent, preparing for their future is important. Not only will life insurance cover funeral expenses, but it can also insure that a spouse and child are able to sustain a certain quality of life. Depending on the policy, this can be either short-term income replacement for working years, or long-term income replacement to help ensure financial stability even beyond the working years. This includes paying off debts, the mortgage, and even college tuition for a dependent.
However, a spouse and children are not the only dependents to consider. Care for parents, grandparents, or a disabled family member should also be a deciding factor. This is especially true if you are single, an only child, or the sole responsibility for their care falls on your shoulders. A life insurance policy can insure that they are properly cared for if you are no longer able to provide the care yourself.
While it is true, that not everyone needs life insurance throughout their entire lives, starting early could have a positive impact on your financial future. Young adults and those who are single and plan to someday have a family should also consider purchasing a policy. Starting a policy early can help lock in the savings and prepare for a financially stable future.
So is there anyone out there who does not need life insurance? The only people who should not necessarily concern themselves with a life insurance policy are those who have acquired enough wealth so that financial obligations will be met even without a policy in place. This is also true if all of your children are grown, you are virtually debt free, and you have enough money or assets to cover funeral and burial expense.
However, you might also consider keeping a policy in force well beyond those years in which you need to have the coverage to protect others. You may want a policy to fund a charitable desire or pay for estate taxes. You never know what you might want to do years from now.
While it may not be a topic most wish to discuss, life insurance is an important part of planning for the future. To help secure a stable financial future for your loved ones, it is important to think about what will happen when you can no longer provide for them. The right life insurance policy may assist with just that.
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