Life insurance, as you know, is designed to protect the people who depend on you for financial support should you die prematurely. But there is much debate about exactly who needs life insurance. Here are some tips that may help you decide if life insurance is the right choice for you.
Do you have a child? Life insurance: no. Children typically do not need life insurance since no one relies on income from them.
Are you a young single adult? Life insurance: maybe. If you’ve just become an adult and entered the workforce, the only reason you would typically need life insurance is to help support an elderly parent or to pay for your own end-of-life expenses (e.g., funeral costs).
Are you an adult with a spouse but no children? Life insurance: maybe. If both you and your spouse are earning income that could support either of you without the other spouse, life insurance may only be necessary if you want to cover your funeral costs. You should, however, seriously consider life insurance if you are thinking about starting a family. Your rates will likely be cheaper now than when you get older.
Are you an adult with an established family? Life insurance: yes. If you have a family that depends on you, whether it’s a spouse or children, you need life insurance now. Don’t limit it to the partner working outside the home, either. The cost of replacing someone to handle domestic chores and child care can cause significant financial problems.
Are you retired or elderly? Life insurance: maybe. Life insurance at this stage in life may only be necessary if you have people depending on your income for support or if you cannot cover funeral expenses.
These are guidelines, but remember, an article can’t replace the knowledge of your individual financial circumstances that a personal financial planner possesses. Let us help you navigate what’s best for you.