Life insurance is intended to help families or other beneficiaries financially if the person they depend on for financial support dies. If a person has dependants which includes children, spouse, aged relatives or dependant sibling they need life insurance. The cash the beneficiary receives from the life insurance will help with funeral costs, living expenses, debt relief and college funds.
Couples who are considering starting a family need life insurance. The rates will be less expensive for younger people than if they wait until they are older. Their future children will depend on their income.
For those who have not purchased life insurance before they started a family, should do so as soon as possible. Life insurance is not only for the parent or parents who provide income, but also for a parent who works in the home. If the homemaker dies, it will be very costly to pay for childcare and domestic help.
Working couples, who would have no problem living on their individual incomes if the other person dies, may not need life insurance. If they would like to leave their partner better off financially and they can afford it, they can purchase a low cost policy.
Life insurance is not necessary for a single young adult unless he or she is supporting aged parents. If there is no one dependent on their income, then no one suffers financially if they die. They may want a small policy to cover funeral costs, but if they have other means for funeral costs they do not need any kind of life insurance.
It is not advisable for elderly people to purchase life insurance unless they still have dependents. It can be very costly because pre-existing medical conditions and simply old age will make the premiums higher. There are other ways to cover funeral costs through savings accounts which are a better option than life insurance.
For people who are a partner in a business which depends on them to generate income. A life insurance policy could save the business for the other partner while he or she is finding a new partner or learning how to run the business alone.
Wealthy people may think they don’t need life insurance because their investments and assets will provide for their dependents. If their assets are not liquid enough to pay estate taxes, then life insurance is the best option. It is a small investment that will save the beneficiaries of the estate a lot of money.
Some things to consider before deciding if life insurance is required are:
- Cost of family lifestyle
- Non-working spouse with no income
- Working spouse may need to quit job to care for children
- Debts that need repayment
- College expenses
- Special needs for disabled parent or child
- Financially dependent parents
- A business partner