Who needs life insurance exactly? Is it just for middle-aged people who support a family? Life insurance could be a good idea depending on many different factors in your life, and here we list a few of the most important.
If you are thinking about starting a family, you should certainly consider buying life insurance, and rates will be cheaper now than when your children are already growing up. On the other hand, if your family is already existent, you especially need life insurance. This could apply to parents whether they are a “breadwinner” or “house husband/wife”, as replacing either of those roles could prove costly in different ways.
Homeowners and mortgage holders
If you’re buying a mortgage, you can opt to choose a life insurance policy which covers your mortgage debt and would safeguard the interest, meaning you wouldn’t have to purchase separate mortgage insurance. In this case, life insurance can see to it that your mortgage debts are paid off if you die, leaving your family and loved ones with nothing to worry about financially.
Couples without children
In this situation, both partners would have to consider if they could individually support themselves if their partner died. If they couldn’t, life insurance may be a good idea. However, if one of you earns more than the other, this process can become complex. You may want to consider first-to-die life insurance policies (lovely name) which mean that one partner receives the death benefit if the other dies first.
People who are insured through their employer
You can still buy your own life insurance policy even if your employer provides you with one. Relying on an employer life insurance policy is risky, mostly because you could lose your job or the company could go under. Furthermore, you’ll lose the policy if you switch companies, complicating the process further. Even if you have been with the same employer for decades, a small backup life insurance policy of your own is not a bad idea if you’re looking to cover all your bases.
People who own a business or have a business partner are incredibly important to the functioning of many people’s lives (i.e. your staff could lose their jobs if you die). As a result, you may be wise to opt for a life insurance policy which takes your business obligations into account and softens the financial blow to your empire should you pass away.
You can buy life insurance on your parents, securing a death benefit to yourself as the beneficiary when they pass away. Assuming you are paying the premiums, you should put yourself down as an irrevocable beneficiary in order to secure the investment. If you do this when your parents are still young, it could be a wise financial decision.
As you age
If you are elderly and no one depends on you financially, traditional life insurance would not be necessary. However, you may wish to take out a policy which covers your funeral expenses, although this may not be easy to come across. One thing to consider, however, is that life insurance in your later years could protect your estate from being subjected to steep taxes, retaining its value and leaving more money to your heirs once you pass away. Nonetheless, this is a complicated process, and it’s best to speak to an attorney if you’re looking to save on taxes in this manner.
Young single adults
As a young single adult, you may require life insurance to pay for your own funeral costs in the event of your death, or you may support someone financially who isn’t a child or spouse, such as an elderly parent or family member. Also, the younger and healthier you are, the cheaper your life insurance premiums will ultimately be, making them cheaper as you age and if you decide to start a family in the future.
With so many types of life insurance out there, it’s no surprise that people get confused. If you need help with getting the right life insurance for you in your personal circumstances, speak to us today and take note of our industry-leading advice!