So, Who Needs Life Insurance Coverage Anyway?
If you believe life insurance doesn’t matter unless you have children, you may be surprised to find out that the list of who actually needs a policy is a full one. It shows us that, while the main purpose of life insurance is to support those who financially dependent upon your income, dependents aren’t necessarily your children, but could be your spouse, an aging parent, a sibling or even a business partner.
Even if you don’t have children, your spouse may still need to replace your income. A death benefit could also help him or her pay off credit cards, a mortgage, car loans and other debt.
Your Spouse and Children
A life insurance payout can help your spouse continue your mutual plans for your children or can simply help the spouse pay the bills and maintain the lifestyle the family has enjoyed. It can also be used to pay for your children’s college educations.
Cover What You Provide as a Stay-at-Home Parent
Your life insurance benefit can be used to provide the non-financial contribution you’ve made to the family as a stay-at-home parent. This allows your spouse to continue to work while paying for needed services such as those provided by a daycare or nanny.
Safeguard the Kids When You’re a Single Parent
If you’re a single parent, you have a lot of responsibilities. With a life insurance policy, you can rest easier knowing that your children will be taken care of financially when you’re gone.
Pay for the Estate Tax You Leave to Your Family
Estate taxes can be as much as 45% of what your assets are worth upon your death. Your heirs can use your life insurance policy proceeds to pay this expense as well as funeral costs and other debt. When properly structured, the proceeds are considered tax-free and won’t add to any estate liability.
Cover Your End of Life Expenses
Many retired people hold enough life insurance to pay for their end-of-life expenses like medical and funeral costs.
Protect Your Small Business
Life insurance coverage can be structured to fund a buy-sell agreement to ensure that remaining owners can buy the company interests of the owner who has passed; this allows the business to go to surviving owners while family heirs receive the funds.
There’s a lot more to learn about life insurance, from what type you need to where to buy a policy at the best price. You can do both on our online Life Insurance page, where you can also use our quote generating tool to receive and compare policies from different providers.