Life insurance is most common for estate planning, but it is not necessary for some people. It is a handy source of income, especially for people who have kids, parents, or a disabled person dependent on them. Even for people without spouses and kids, life insurance is used for paying off debts for the deceased owner, catering for their funeral expenses or even paying off taxes.
When You Don’t Need Life Insurance
While life insurance is important, not everyone needs it. For instance, you are single and probably don’t plan on getting a partner or a child soon, you may not need a life insurance policy.
Also, you may not need it if both you and your spouse are working and can both sustain yourself financially. These are some of the obvious reasons you won’t need a life insurance policy. Before buying an insurance policy, check with an expert first to help you gauge your situation and see if it will be necessary.
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When You Need It
Some of the common instances you may need life insurance include:
If You Have a Child
If you have a child or children, then you may need life insurance. It is a way to sustain their living when you pass away. There are many factors that will determine the kind of life insurance policy you will choose. For instance, the amount of money your dependents will need for their expenses.
You will also have to consider the time it will take for your children to become self-sufficient. At the time of securing the insurance, is your child an infant or is he/she in school? For obvious reasons, a small child may need more income from the policy as compared to one who is in college. This way, it will be easy to choose an insurance policy that will sustain them all through until they can take care of themselves.
If You Have a Dependent
According to life insurance website, CFAinsure, dependents are the top reason people get life insurance. Dependents can be different, it can be your spouse or parents. You may also need life insurance if your partner depends on your income. The last thing you want is to leave your partner stranded with finances after you die. If your spouse solely depends on your income to sustain his/her lifestyle, you need to think about how they will survive in the event of your death.
Also, you may need a life insurance policy to help pay off your spouse’s debt. Your spouse can place the insurance policy as collateral for their loan and use it to pay off the debt.
Your parents may also be dependents of your income. If so, securing a life insurance policy will help fund their needs if and when you die.
To Sustain a Business
If you own a business, then you need to think about the life of your business after you die. Do you have dependents who will take over the business after you? If so, will there be enough funds to sustain the business? Also, you may not have a dependent to take over the business, but instead, you would wish for the business to be sold. It may not be easy to get a buyer immediately after your demise, so you need to find ways to sustain it until it gets a new owner. You can secure a life insurance policy as a means of funding your business after you pass away.
Life insurance applies in different ways to different people. If you assess your situation and find the need for a life insurance policy, then the earlier you start the better. Furthermore, insurance policies get more expensive as you age so the younger you start the more advantage you will be.
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