Life insurance is not really about you living or dying. You need to have peace of mind when planning for life’s unexpected and predetermined events. Planning for your eventual death eases the overall anxiety of securing your financial future. If it is determined that you do not need life insurance, there is no need to waste money.
Questions to ask yourself include: Have you prepaid your funeral costs? Do your assets exceed your debts? If you have not foreseen to put away this money, who will pay? Do you want to leave this burden on family or friends?
There are three sets of people in regard to life insurance.
1. Those who do not carry life insurance.
2. Those who carry life insurance
3. And those who have met with their Independent Insurance Agent to determine and carry the appropriate amount of life insurance in regards to their personal financial situation.
Generally, if you have no debt, no dependents, and no funeral costs, you can pass on life insurance. Wow – that is a relief! However, living life in such a carefree financial manner is not possible for all. Anyone with a family and fiscal obligations should weigh the costs and benefits of life insurance coverage.
But, I am single?
If no one else is relying on your income, you can breathe easier. It is important to remember that single people can and do die with just as many expenses as married people. Credit cards, mortgage payments, car loans, and funeral costs are not exclusive to couples. Who will be liable for these expenses if you pass away?
But, I have life insurance through my employer?
Many employers, not all, offer life insurance benefits. Even with company sponsored life insurance coverage, most employers cover one to two times your annual salary. Is this enough coverage for your individual situation? No one’s situation is the same; given that, a general coverage guideline is between five and ten times your annual salary.
But, I am a stay-at-home parent?
You may not always feel this way, but you are an invaluable resource. Think about it. Childcare, cooking, cleaning, transportation. If you can’t perform these tasks, who will and at what cost?
The average cost of center-based daycare in the United States is $11,666 per year ($972 a month). Costs are even higher in larger, more populated cites, according to the National Association of Child Care Resource & Referral Agencies (NACCRRA). If you were not at home, could your spouse or partner afford this expense?
But, I’m Retired
The proceeds of a life insurance policy are payable immediately, allowing heirs to take care of estate taxes, funeral costs, and other debts without having to hastily liquidate other assets, often at a fraction of their true value.