Think you don’t need life insurance because you’re not married with children? You may want to reconsider.
Most of us understand that life insurance makes sense if someone will suffer financially when you die. So, the most obvious example of someone who needs life insurance is the primary earner in a family with children. But life insurance makes sense for others as well. Some reasons you might want to consider life insurance:
- You’re Single. Most single people don’t need life insurance because no on depends on them financially. But there are exceptions. Some single people provide financial support for aging parents or a sibling with special needs. Others may be carrying significant debt they don’t want to pass on to family members who survive them. Insurability is another reason to consider life insurance when you’re single. If you’re young and healthy and expect to start a family later, buying insurance now could save you money later since life insurance rates are based on you age and health at the time you buy it.
- You’re married, but don’t have children. People often assume they don’t need life insurance until they have children. But, if you died, would your spouse be able to able to afford shared credit card debt, car payments, a mortgage or rent? If you expect to have children later, buying life insurance now may lower your cost since rates are based on your age and health at the time you buy. And some companies won’t issue policies to pregnant women.
- You’re a Stay-At-Home Parent. I discussed this in a recent (Valentine’s Day) post, but the bottom line is that stay-at-home parents contribute significantly to the financial well-being of their family through the many things they do that a surviving spouse would have to pay to have done.
- You’re a Single Parent. Single parents have even more responsibility for their children than parents who are raising them together. But nearly four out of 10 single parents don’t have life insurance. Who will take care of your children if you die? Can the new caregivers for your children afford the added costs of taking care of your children?
- Your Children Are Grown. Just because your kids are through college and the mortgage is paid off doesn’t necessarily mean you no longer need life insurance. Could your spouse continue to maintain the lifestyle you’ve worked to achieve now and into retirement? Is there money to cover your debts and other financial obligations that would have to be paid?
- You’re Retired. Do you have retirement income that would end or be diminished enough to create financial hardship for your surviving spouse? Depending on the size of your estate, your heirs could be subject to an estate-tax payment. The proceeds of a life insurance policy are payable immediately, allowing your heirs to take care of these taxes, funeral costs and other debts without having to hastily liquidate other assets. Life insurance proceeds are generally income-tax free and won’t add to your estate tax liability if properly structured.
Everyone’s situation is unique. But I hope I’ve made the point that deciding whether you need life insurance is more involved than you may have realized.
Questions about how whether you need life insurance? Call me at 303.922.1002.