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How To Determine If You Need Life Insurance


Life insurance is a financial product designed to pay for a person’s expenses in the event of an untimely death. There are many good reasons why a person should consider buying life insurance. However, there are certain reasons that having life insurance should be considered mandatory for those who do not have the cash savings to cover these expenses. The good news is that life insurance is typically less expensive than most people imagine. This means there is no reason for a person to fail to financially plan for those are left behind in the event of an untimely death.

Young Children

The primary reason that a person needs life insurance is to provide care for minor children in the event of an early death of a parent. A life insurance policy should be purchased that is large enough to provide care for the children until they become an adult. In addition, the life insurance policy should have a death benefit that is large enough to also cover college or other post-secondary educational expenses that will allow the child to become a financially self-sufficient adult. Either whole life or term life insurance can be used to provide for children, but term life policies are much less expensive. This lower cost allows young families who might be financially struggling to more easily afford the insurance premium for the needed benefit amount.

Mortgage and Other Debt

Married couples who have extensive debt obligations, such as a home mortgage, should carry life insurance to financially protect the surviving spouse in the event of an untimely death. This is true for couples where both people work and when one stays at home. This is due to the fact that neither party is likely to be able to afford the mortgage payments on a single income. Couples who owe large debts, such as automobile loans and credit card balances, should also carry life insurance to cover these debts.

Final Expenses

A whole life insurance policy can be used by a person to plan for paying final expenses such as funeral and burial costs. Though final expense insurance policies are available for this purpose, these policies have some problems. In many cases, final expense policies are not written by highly rated and financially strong insurance companies. In addition, final expense policies are typically more expensive than a standard life insurance policy with a comparable benefit amount.

Valuable Estate

Those who have a valuable estate should expect to have significant costs related to managing the estate and transferring ownership of the property in the estate at the time of death. Examples of large estates include those who own a business and large landholders such as real estate investors and farmers. One way to plan for and to pay these costs is through a whole life insurance policy. A life insurance policy can be purchased leaving a death benefit to the estate executor or other

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