Let’s face it. When you hear “Who needs life insurance?”, you probably know you’re the one who needs it.
You’re young and healthy. Getting life insurance isn’t at the top of your to-do list. And it’s not at the bottom either. The truth is life insurance didn’t make yesterday’s priority list.
Below are just a few scenarios, because today is the best time to get insured.
This scenario probably goes without saying.
If you haven’t built up enough assets to self-insure, then it’s vital that you and your significant other get insured.
If one of you were to pass away, the survivor will have many responsibilities. Many times, underinsured families who lose the primary income earner have to downsize their lifestyle significantly.
Since you’re childless, your spouse could manage without your income, right? Maybe not.
Usually, your spouse would become responsible for your debts. Your student loans, car loan, credit card debt, and the mortgage are going to fall on your spouse’s shoulders. Your spouse’s income might not be enough to cover living expenses and your debts.
For married parents and solo parents with dependent children, life insurance is a must. It would give your family a way to handle their living expenses without your income.
Your family could also use the life insurance benefit to cover large future expenses like college tuition or a down payment for a home.
There’s no question you have a big job. Childcare, cleaning, cooking, managing household finances, and providing transportation for the kids are probably just a few of your responsibilities.
In the event you weren’t around, paying for the work you were doing could wreak havoc on the family’s budget.
For instance, your family may have to pay the high cost of daycare so your spouse can work.
Life insurance can keep new expenses from becoming a burden.
When an aging parent or special needs sibling relies on your support, their quality of life can drop dramatically without you. Since these loved ones may never be in a position to earn income, the benefit from your life insurance policy can provide them with a lifeline to stay afloat.
If you co-own a business, consider setting up a buy-sell agreement. It’s a legally binding contract that spells out how to transfer ownership at death. These agreements typically outline a way for the surviving owners to purchase the share of the deceased owner.
What does a buy-sell agreement have to do with life insurance?
Often, a life insurance policy is set up to fund the purchase. Your business partner(s) would pay your family for your share of the business with the proceeds from a life insurance policy.
Your age and health are the biggest factors in determining how much you’ll pay for a life insurance policy.
The younger you are, the more affordable your life insurance options will be. While you’re young, it’s also less likely that you’ll have chronic medical conditions that can drive up life insurance premiums.
See how the cost for a healthy adult with a $500,000, 30-year term insurance policy changes every 10 years.