Life insurance might not be a fun topic to discuss for most people. However, it is a conversation we all need to have, particularly sooner rather than later. Your current life circumstances and age will dictate whether or not now is a good time to add life insurance coverage. If you think you don’t need coverage right now, you might be surprised. So let’s look at the important question: “Do I Need Life Insurance?”
What Is Your Current Situation?
The key to answering the question do I need life insurance is all about examining your individual circumstances. While some companies will try to sell you coverage no matter what, we believe in providing only the right coverage to our customers and nothing more. Sol let’s look at four different circumstances to see when life insurance is a wise investment.
1. Single / Young
Young single people rarely think about buying life insurance, and the reality is that is perfectly ok. Often you will not need life insurance during this phase of your life. Plus, if you’re paying off student loans, your financial focus should be on that debt. The better bet is taking the premiums you pay for life insurance and applying them to your loans. Don’t worry about your student debt carrying over to your family should you pass away either. As long as it is a federal student loan, those are forgiven in the event you pass on.
However, there are a few situations where you still may want to carry life insurance. If you possess a good amount of debt aside from federal loans, you can protect your family from shouldering that burden in an accident. There is also the issue of funeral costs. But at this stage in life, it may be better to work with a financial advisor to build your savings vs. paying life insurance premiums. The Federal Trade Commission has a worksheet to help you estimate funeral costs so you can plan accordingly.
Congratulations! You’re married, and now your responsibilities have increased. You may have a mortgage with your spouse, and you likely rely on shared income to pay for all the important things in life. Now that someone else is dependent on you, it is time to seriously look at life insurance. Should you pass away unexpectedly, you don’t want your partner saddled with debt and a loss of income. Fortunately, if you’re still young, life insurance is very affordable. Plus if you don’t carry a lot of debt, you can discuss the best options with a financial advisor before buying coverage.
3. Have Dependents / Children
Almost 99% of the time, if you have dependents or children who rely on you, life insurance is needed. Your children rely on your income until 18 and often times even longer. The loss of income and the costs associated with a funeral could place your spouse in a tough situation when they are trying to support children on their own. It is actually not a bad idea to start shopping for life insurance when you’re pregnant. The longer you wait after you have children, the more your monthly premiums might rise.
4. Empty Nest / Retirement
So you’ve successfully raised your children and/or entered into retirement. You don’t have near the financial responsibility you had with children either. You don’t have life insurance currently for one reason or another, so is it worth getting at this stage in life? The answer is yes, you should still invest in life insurance. If you’re still married, the loss of income could bring hardship for your partner, especially if you still have a mortgage. Also, you want to protect your savings, particularly if you want to leave inheritance for your children and spouse. Life insurance premiums will be higher at this point versus when you were young, so the sooner you get coverage, the better.
How Does Age Factor In?
Age is an important factor you should always consider when shopping for life insurance. The simple fact is the older you get, the more likely it is that the insurance company will have to pay out. If you’re shopping at an older age, your coverage is going to be more expensive because of this. Just because its expensive does not mean you should skip it. As we examined above, its important to carry it for your dependents, spouse and to cover funeral costs. Other factors like whether or not you’re a smoker can affect pricing as well. The best thing you can do if you’re older is shop around with several different companies. Square State Insurance is a licensed broker, and this allows us to compare several top rated companies to discover the best prices for your needs. We do not recommend picking one company and without comparing rates.
Do I Need Life Insurance – Final Thoughts
It is ok to have read through this article and still not be sure whether you need life insurance or not. That is why we’re here! Square State Insurance can discuss your individual situation to determine the right course of action. We’ll also present you with different coverage options and explain the strengths of each product. You don’t have to wait to get started either. Request a quote on the form below, and we’ll get back to you right away. Feel free to contact us with any questions you have as well.