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Why Do We Need Life Insurance - Life Quotes, Inc. Answers This Question And Gives You A Free Online
Why do we need life insurance? There are still a lot of people who are not convinced
that life insurance is necessary to secure their future as well as their families.According to the Life and Health Insurance Foundation for Education (LIFE), individuals should consider a worst-case scenario of what would happen if they died tomorrow, and ask themselves if their survivors would be able to meet ongoing living expenses even after their passing. Another consideration would be their familys long-term financial goals and the impact that their death could have on these goals.
The foundation offers several different scenarios to illustrate the importance of life insurance to individuals and families:
Singles
There are people who may be single but are providing financial support to their aging parents or siblings. There are those who may have a significant debt which they wouldnt want to pass on to their family. Life insurance ensures that their parents or siblings financial needs are covered and that their loved ones will not have to shoulder their debts when they pass away. For those who are still young and are healthy, life insurance rates are also at the lowest rate possible and guarantee coverage for later in life.
Married Couples
Even for couples without children, the death of a spouse could cripple the other spouse financially. Couples need to ensure that the surviving spouse will be able to pay off debts like credit-card balances and car loans, rent and utility bills. Some life insurance companies do not issue insurance to women during her pregnancy, and so getting a policy before having a baby on the way would avoid this potential problem.
Married With Kids
Many families depend on both parents to make ends meet. If one parent died suddenly, the family may not be able to maintain their standard of living. Having life insurance coverage will help provide financial support to the spouse and children even after one of the parents have gone.
Single Parents
Nearly four out of ten single parents have no life insurance and many of those who have coverage say they need more than what they have. Being a single parent entails so much responsibility and having life insurance could safeguard the financial future of their children.
Stay At Home Parents
Even though a parent is not actually working to earn income for the family, losing this parent would lead to losses that would involve certain costs in having these tasks replaced. These costs could be for childcare, transportation, cleaning, cooking and other household activities. Surveys have estimated the value of these services at more than $40,000 per year.
Those With Grown Children
Even when the children have grown up, finished college, and have become financially independent, one spouse could outlive the other by years or decades and have long-term financial needs. Having a life insurance policy will help provide for the surviving spouses needs.
The Retired
Large estates are taxed and take time to settle. Life insurance, on the other hand, is not taxed and pays out immediately, allowing heirs to take care of estate taxes, funeral costs and other debts without having to quickly liquidate other assets.
A Small Business Owner
A life insurance policy can be structured to fund a buy-sell agreement which would provide the necessary funds to the other business owners so that they can buy the company interests of a deceased owner at a previously agreed upon price. This way, the owners get the business and the family gets the money. An employer can also take out a policy on a key employee. This key person insurance, payable to the company, would cover the cost of hiring a replacement if the employee died.
So why do we need life insurance? Whatever your individual needs and financial capacity may be, getting a life insurance policy is a necessary for financial security. Life Quotes, Inc. provides free online quote. Learn more about what life insurance fits your needs from their financial planners today.
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