Do I Need Life Insurance?
Life insurance is a fantastic gift that you leave behind to those you love who could suffer financially following your death. This gift comes in the form of cash, known as a death benefit, and serves many purposes such as: replacing your lost income to help your family meet their important financial needs and maintain their lifestyle; pay off existing debts; and pay for final expenses such as funeral costs. The added benefit is that there is no federal income tax on life insurance benefits.
So, who might need a life insurance policy?
Let’s have a look at a few different scenarios and how life insurance could play a role in your plans:
A lot of single people don’t believe they have a need for life insurance because they don’t have anyone financially dependent upon them. But that’s not always the case: some single people provide financial support for aging parents or siblings with special needs. Others may have a significant amount of debt that would be left for their family to repay upon their passing. An extremely important factor about life insurance that many single people overlook is their future insurability. When you’re young, healthy and have a good family history your insurability is at its peak which means that you will be rewarded with the best rates on life insurance. Don’t wait until you experience a change in your health…and remember that time flies quickly and before you know it, you’re much older than you remember. Lock in your rates and your insurability as soon as you can! Your future is bright – keep your financial plans top of mind!
Congratulations! You and your loved one have tied the knot and are looking forward to a great life ahead of you. Many people believe that they don’t need an insurance policy until they have children – but this is not the case! If one of you were to pass away tomorrow, what impact would that have on your spouse – would they be able to pay off debts such as credit card balances or loans, let alone cover their monthly rent/mortgage payment in the absence of your income? And if you are planning on having children, it’s always best to get a jump start on your financial planning for their future (as well as yours). Keep in mind that the pricing for insurance is based on your age and health status at application time – don’t wait for rates to increase or for there to be a shift in your health!
You’re Married…With Children
Most families rely on a dual income to make ends meet. If one of the spouses passes away suddenly, could your family continue to meet all your financial obligations? This includes paying rent/mortgage on a monthly basis, paying for kids’ activities such as sports, and planning for the kids’ future – will they still be able to go to University if they are dependent upon you for financial support? Life insurance makes sure that your plans for the future don’t die when you do.
You’re a Single Parent
When you’re a single parent, you play many roles: you are the caregiver, the sole financial support, the chauffeur, the chef, the project manager – and so much more! With all of this resting on your shoulders, you need to take extra care that you have enough life insurance to safeguard your children’s financial future.
You’re a Stay-At-Home Parent
It’s been said that a stay-at-home parent is worth their weight in gold. While you may not be working outside of the house, you are definitely working inside it! Taking care of the childcare, the household activities and more, the replacement value for this work is often significantly undervalued. Life insurance can help your family afford to make the choice that best preserves their quality of life if you are not there.
You Have Grown Children
Your kids are grown and (hopefully) out of the house – you’ve reached another milestone in life! But just because you don’t have kids at home and potentially no mortgage doesn’t mean that your need for life insurance goes away. Your spouse would still be facing the financial impact of losing you. Be sure that your spouse can maintain the lifestyle that you’ve worked so hard to achieve now and into retirement!
Ahhh….finally – your time is your own! Asides from all of the previously mentioned benefits of maintaining life insurance, keep in mind that depending on the size of your estate, your heirs could be hit with an estate-tax payment of up to 45% after you pass away. Because the proceeds of a life insurance policy are paid immediately, your heirs can take care of any taxes, funeral costs and other debts without having to liquidate your assets (often at a reduced amount of their true value) quickly.
You’re a Small-Business Owner
You’ve worked so hard to build your business – ensure that you protect it! Life insurance can not only take care of your family, but also protects your business. What would happen to your business if you or a business partner were to suddenly pass-away? Life insurance can help in many ways – from policies including buy-sell agreements to key person insurance, life insurance is an integral part of your business’ financial plan.
So, who might need a life insurance policy?
As you can see, there are benefits of life insurance policies for every stage of your life. While it isn’t always the most fun or exciting thing to purchase, life insurance is critically important to secure your and your families’ financial futures.
If you have questions or would like to discuss your options for Life and Living Benefits more, contact us today and speak with our Licensed Insurance Advisor!