No matter your age or stage of life, you may have asked yourself at some point: Do I need life insurance? The topic of life insurance can be confusing, with several different types available. And sometimes its difficult to know how much coverage you need.
It might help to understand the two main types of life insurance. Term life insurance provides coverage for a specified period of time — usually between 5 and 30 years. Permanent life insurance lasts as long as youre living, as long as you continue paying the premiums. You can learn more here about the differences between term and permanent life insurance.
While its generally a good idea for everyone to have life insurance, there are some situations in life where its even more important. Explore the profiles below, and find where you fit in.
Even a Single With No Dependents Needs Life Insurance?
If youre young and single with no dependents, you might think you are one of the only people who can technically get away without life insurance. If no one else is depending on your income, you dont need to plan for anyone elses financial future … right? One exception, though, could be if your parents would need help covering your end-of-life expenses or outstanding debts, like school loans or credit card payments. In this case, having a life insurance policy could go a long way. Even if this doesnt apply to you, purchasing life insurance when you are single with no dependents is still a smart and forward-thinking decision. The price of life insurance increases as you age, so theres never a better time to buy than when youre the youngest and healthiest.
Just Got Married
When the wedding bells ring, its time to get serious about purchasing a life insurance policy. Youre now sharing your financial life with someone else. Whats yours is mine, applies to more than just the high-tech coffee maker. It also applies to debt. Whether thats from credit cards or student loans.
And after saying, I do, its likely that more big financial decisions are on the horizon. Remember, the best time to buy life insurance is when youre young. You can expect lower premiums from the insurance companies, so lock in your low price when you can. Buying life insurance when you get married is the perfect way to start your financial safety net and plan for the long-term.
Buying a House
Heres one of those previously mentioned big financial decisions. Buying a house is one situation where not having life insurance could be detrimental.
Taking on a home mortgage is a significant expense that depends on a stable income for years in the future. When a family breadwinner passes, it can create a financial burden for those left behind. They may not be able to continue making mortgage payments, causing an unfortunate situation of loss to become even worse.
While mortgage insurance is one option for protecting against this outcome, a term life insurance policy is generally the better choice for the following reasons:
- You can choose your benefit amount
- Your beneficiary is in control
- Your policy can extend beyond your mortgage term
- They generally cost less
Starting a Family
First comes love, then comes marriage. You know the rest: a baby. And maybe more than one, right? Then — if you havent done it already — comes the wise decision to purchase a life insurance policy.
Buying life insurance when you become a parent is one of the best things you can do to protect your family for years in the future. A 20- or 30-year term life policy might be exactly what is needed to ensure your spouse has financial support and your children are cared for up until adulthood. Death benefits from a life insurance policy can do more than just keep everyone fed. They can also contribute to ongoing household expenses, and even assist in paying college tuition.
According to a Pew Research study, 18% of U.S. parents stay at home. If thats you or your spouse, dont discount the importance of having a life insurance policy. While stay-at-home parents may not be breadwinners, they are providers for the family. A sudden loss could have a financial impact in a different way. Such as needing to find daycare or childcare services.
Even if you already have a life insurance policy, milestones such as the birth of a child are a great time to re-evaluate your coverage.
Business Owners Need Life Insurance
If youre a business owner, your family isnt the only one depending on you. Your business partners and employees are also relying on you to manage the company and provide them with an income. But just like buying a home and taking out a mortgage, your family may not be equipped to take over your business expenses if you die.
They may be unable to sell it. And if loans were involved, they would bear the burden of paying off those loans. In the worst-case scenario, personal assets could be repossessed, or the company could fold altogether. Not only would your family be impacted, but all of your employees as well.
Having a life insurance policy, or multiple policies, can do a lot of good in protecting your familys future. This would give them the ability to pay off any business debt, as well as the time to decide how to best move forward with the company.
If you havent bought life insurance by the time you retire, the timing may not be ideal as the price increases with age.
But at this age, if youve planned your finances carefully, retirement income should provide everything a surviving spouse needs. Your mortgage may be fully paid off. Your children will be grown and able to support themselves. In this case, you may not need life insurance.
Still, life insurance could make sense even after achieving the retirement milestone.
Who Needs Life Insurance? You Do.
Through almost every stage in life, life insurance is a worthwhile investment. But remember, its always cheaper to buy it when youre younger.
No matter the milestone, your licensed SelectQuote agent is here to help you find the right policy that meets your familys needs. For now. And for the future.
Contact us and receive your free, no-obligation quote today.