I’m a firm believer than everyone needs at least some life insurance. Personally, I have a couple of policies in place, including an employer-sponsored plan through my full time job and a policy that my parents have had on me since shortly after my birth. Even still, I feel under-insured now that I’m an adult with several liabilities that would need cleared if something were to happen to me.
During my research, I’ve come to find there are some people that need life insurance more than others. Here are 4 groups of people that probably need life insurance the most.
During my search for more insurance, I was surprised to find that I’m someone who is considered to need life insurance the most. As a young single, life insurance can be utilized to pay off debts, cover funeral costs, give a windfall to a charity, or take care of aging parents. Plus, young single people likely get the lowest rates so it might make sense to lock in premium at a low cost for the life of your policy, which is especially important if you plan on getting married and having kids one day.
Stay at Home Parents
Moms and Dads who don’t work outside the home are often over-looked when it comes to life insurance. Because they aren’t earning an income, they are often consider to be worth less than the parent who is bringing home the bacon, but that is untrue. While they don’t contribute directly to the financial bottom line of the family, they are providing a great service that would have to be replaced if they were to pass away.
Small business owners commonly dismiss the idea of having a life insurance policy on themselves or their partners. But in reality, having a policy on yourself and any business partners is a good idea. That way if one of you dies, the other(s) may purchase your portion of the business at a prearranged price via a buy-sell agreement. Some policies may be borrowed against if you come upon hard financial times and need funds to keep your business afloat.
Retirees and Empty Nesters
Just because your kids are grown and gone doesn’t mean you no longer need life insurance. If you still have debt when you pass away, you partner or family will be responsible for paying that back in full (in most cases). But even if you have no debt, your surviving spouse will still have day-to-day living expenses to pay for. Plus, you heirs can end up having to pay up to 45% of the value of your estate in taxes after you die. Your life insurance policy may be able to help with all of these expenses so assets don’t have to be liquidized quickly at a loss.
More people actually have a need for life insurance than those who realize it, and even those with life insurance policies in place are often under-insured compared to what they should actually have.
Do you have life insurance?