You might want to consider buying life insurance on your own life mainly for two reasons. For one, you have a dear family or people that depend on your income. You are certainly concerned of their well being and want to continue your financial support for their home, education, life expenses, etc. Secondly you may also want to make sure that you will have enough money for a decent funeral for yourself.
This article provides you with some guidelines to help you decide whether or not you need a life insurance and, in case you do need one, evaluate how much you need to buy. You can start by asking yourself the following questions:
Does anyone depend on your financial support? If “no”, then you may not need one unless you want to ensure that you will have enough money to take care of your own issues after death, such as your own funeral.
Have you established a family, or are you starting one? If your answer is “yes”, then life insurance should be a right choice for you, especially if your earning capacity has been crucial to your family. You do not want to add pain to your spouse, parents, or kids as they risk becoming homeless after your fatal accident. Even if you do not have a job outside and only take domestic care of your family, it is still worth to buy a life insurance against the cost of replacing your housework or childcare. For new families, it usually cost less to purchase insurance than when you become older.
How much money do you need to cover the living expenses of your dependents? You can roughly estimate their financial need by subtracting the property they would inherit, from the amount of income you regularly provide them with. In addition to inheritance, there are other sources that may become available to your family upon your accident. For example, they may be able to access aids from public sources such as unions, or receive coverage from other private insurance plans and pensions. Other possible support might come from children’s grandparents or relatives. You can deduct these external supports as well because you want to buy only as much insurance as you need.
How long will it take for your family to become independent? If you have children who will soon graduate from college and able to get a job, you may need to worry less about their financial need. If your children are young, you may want to set aside more money for their education and growth. However do take into consideration that most schools provide financial aids or scholarships.
Do you own business? If you own business and plan to pass it on to your family, you might want to reckon if they have enough capital or cash to run the business. You may also need to estimate how much the cash flow or liquidity of your business might be affected by your accident.
All that being said, however there are cases when you may NOT need a life insurance. Life insurance is especially expensive to the elder. If you and your spouse are seniors and do not have dependents, life insurance may not be necessary to you, unless you cannot pay for your own funeral otherwise.
It is the same with a single adult, unless you have parents that depend on you.
For couples without children, life insurance can be very helpful to the significant other, especially if only one person is the major contributor to the family’s income. If both are working and can sufficiently support themselves, life insurance may be optional.
In all the cases discussed above, we encourage you to do some research on the life insurance options and carefully evaluate your own need. You can also consult your financial advisors to work out the best plan.
You might want to consider buying life insurance on your own life mainly for two reasons. For one, you have a dear family or people that depend on your income. You are certainly concerned of their well being and want to continue your financial support for their home, education, life expenses, etc. Secondly you may also want to make sure that you will have enough money for a decent funeral for yourself. 