» Compare: Term life insurance quotes
If you have already planned ahead and have policies in place, have you spoken to the people who will be affected by them? Let’s break down why you need life insurance and why it’s important to talk about it.
Which categories do you fall under?
If you’re married…
You may think you don’t need life insurance if you don’t have children, but that’s not true.
If you or your spouse die unexpectedly, will the survivor struggle to keep up with the bills? Even if the surviving spouse makes an income, is it enough to maintain the life you shared?
If you’re a single parent…
As a single parent, you’re the caregiver, breadwinner, housekeeper, cook, chauffeur, and so much more. These responsibilities rest on your shoulders alone, so it’s extremely important that you have enough life insurance to safeguard your children’s financial future.
Most families need life insurance, but single parents arguably need it the most. If you die, your children will need immediate support.
Term life insurance is ideal because it’s the most affordable type of life insurance. In addition to buying a term life insurance policy, be sure to write and validate a will. You need to designate guardians to care for your children should you die unexpectedly.
If you’re married with children…
Most families depend on two incomes to make ends meet these days. Could your family maintain their standard of living on one income?
Life insurance makes sure that your plans for your family’s future can still come true even if you pass away. Take a moment and consider how much it takes to run your household.
Should one parent pass away or died tomorrow, having the means to be able to stay in your home will help the surviving parent and children heal. Disrupting life as little as possible in the wake of the death of a parent is key. Life insurance can help ensure this happens.
If you’re a stay-at-home parent…
The job of a stay-at-home parent is never done. Childcare and managing the household are all important tasks, the replacement value of which are often severely underestimated.
Could your spouse afford to pay someone to manage these services? With life insurance in place, your surviving spouse could take time off work and have the funds to make sure the tasks you did in-and-out every day are properly taken care of.
Before a stay-at-home parent can get life insurance coverage, insurance companies require that the working parent have life insurance. Then, most companies will approve coverage amounts up to the amount insuring the working spouse.
If you have a special needs child…
Taking care of children with special needs is a full-time parenting job. On top of taking care of “typical” child necessities like food and clothing, you may also be spending money on extra things such as medical necessities, learning tools, special classes and after-school programs.
Most families only need term life insurance, which is temporary. However, if your special needs child will be financially dependent on you for life, permanent life insurance may be more appropriate.
You need to make sure you have enough life insurance coverage so your child will be well taken care of if you are no longer around to do so yourself. This also means you need to name guardians in your will should both you and your partner die at the same time.
Planning for the future of an individual with special needs requires in-depth knowledge of federal laws as they pertain to government benefit eligibility and legal documents such as special needs trusts and guardianships.
We can help with the life insurance piece of the puzzle before someone died tomorrow. Reach out to an estate planning attorney for the other aspects such as trusts.
If you’re a small business owner…
Life insurance has many roles for a business owner.
A life insurance policy can be structured to fund a buy-sell agreement. For co-owners, a buy-sell would ensure that the remaining business owners have the funds to buy the company interests of a deceased owner at a previously agreed upon price. This arrangement allows the owners to keep the business while the family still gets the money.
A buy-sell can also be used for a one-owner business. The owner would make an agreement with whomever will be the new owner. The new owner would pay the death benefit to the family in exchange for the business interest.
Key person insurance protects a business in case of the death of a key employee. This insurance policy death benefit is payable to the company providing owners with the financial flexibility needed to hire a replacement.
Life insurance can also help a business owner equalize an inheritance. For families with multiple children, chances are not all the children want to take over managing the business upon the parent’s death. When the family business owner dies, the business is left to the children who want to take over, and the life insurance death benefit is distributed to the other children.
If you have grown children…
Just because the kids are through college, it doesn’t mean they are instantly financially independent. You may still need to support them for years.
If you have grandchildren, do you want to help provide for their college? Or perhaps you want to leave an inheritance.
You may want to consider a small permanent life insurance policy. If you have a healthy savings and retirement funds, however, life insurance may not be necessary.
If you’re retired…
Although the mortgage may be paid off, it doesn’t necessarily mean that Social Security and your savings will take care of whatever lies ahead. Life insurance would enable your spouse to maintain the lifestyle you worked so hard to achieve and you would be able to pass on something to your grandchildren.
Depending on the size of your estate, your heirs could be hit with a large estate tax payment after you die. The proceeds of a life insurance policy are payable immediately, allowing your heirs to take care of estate taxes, funeral costs, and other final expenses without having to worry about liquidating other assets.
If you’re single…
Some single people provide financial support for aging parents or siblings. Others may be carrying significant debt they wouldn’t want to pass onto family members.
If you’re young and healthy, your insurability is likely at an all-time high and you can lock in the best life insurance rate available. If you anticipate a need for life insurance down the road, it might make sense for you to lock in coverage now while you’re young. Always ask yourself, “what if I died tomorrow?”
See what you’d pay for life insurance
Life insurance is a gift for the ones you love most. After you purchase it, don’t hide the fact that you did so. If something happened to you or you died tomorrow, the last thing you want is your loved ones stressing out trying to find the policy information.
The original documents should be kept in a safe place, like a fire-proof safe in your home. It’s a good idea to give a copy to the beneficiaries and also a trusted sibling or parent. If you have a lawyer, they should have a copy as well. The goal is to make it easy for your loved ones to locate the policy in the event that they would need it.
» Learn more: Keeping Your Life Insurance Policy Safe
Term life insurance is the “better safe than sorry” life insurance. Like with home or auto insurance, term life insurance is something you hope is never used but are wise to have just in case.
At Quotacy, planning for the financial protection of your loved ones is easy. No need to give up your name, phone number, or e-mail to get quote. Getting a term life insurance quote with Quotacy is the easiest thing you’ll do all day. Don’t wait, there’s no time like the present to lock in those affordable rates.
» Calculate: Life insurance needs calculator
Note: Life insurance quotes used in this article accurate as of December 7, 2020. These are only estimates and your life insurance costs may be higher or lower.
About the writer
Natasha Cornelius, CLU
Senior Editor and Life Insurance Expert
Natasha Cornelius, CLU, is a writer, editor, and life insurance researcher for Quotacy.com where her goal is to make life insurance more transparent and easier to understand. She has been in the life insurance industry since 2010 and has been writing about life insurance since 2014. Natasha earned her Chartered Life Underwriter designation in 2022. She is also co-host of Quotacy’s YouTube series. Connect with her on LinkedIn.