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Does Everyone Need A Life Insurance Policy?

It’s safe to say that not everyone needs a life insurance policy. But it’s also safe to say that it’s in the best interest of most families that the breadwinner has life insurance. Since your spouse and your family are dependent upon you for their well-being, it is advisable to take out a life insurance policy if have not already. If you are not the breadwinner in the family, or are single and do not have a family to support, you may not need life insurance at the present time, but may benefit under certain circumstances.

Understand The Impact On The Family – A life insurance policy does little if anything for those taking a policy out, beyond giving them the peace of mind that when they die, their family will not be left without the financial means to carry on.  The decision as to whether or not you need a life insurance policy is based upon what the economic impact will be on your family should you die.

It’s Not Just The Numbers – Determining how much coverage a policy should provide takes a great deal of thought. Most of us tend to sign up to a given amount in a brief time, often at the prompting of the insurance agent. The agent might try to go for higher coverage, which would earn them a higher commission, while you are arguing for lower coverage with lower monthly payments. This is not the proper way to determine the amount of coverage a policy should provide. Most agents should work with you to decide not just how much coverage you should have, but why; and should also give you time to think it over.

As a main income earner, you might not mind seeing the surviving members of your family live a life of luxury for the rest of their lives after you’ve gone. That’s fine if you can pay the high premiums. At the other extreme, you may opt for just enough coverage to provide your dependents with income for a year or two. That’s not always ideal.  As a rule of thumb, plan on leaving your spouse and family an income similar to what you provide that will last for at least five years, possibly 10 years if your children are still quite young. In 10 years’ time, most families can usually adapt, without having to make drastic changes to their standard of living within months of your death.

Even if you are older, your children are grown, and you’ve accumulated significant wealth, a life insurance policy having less coverage might still be useful –  to pay estate taxes, or funeral expenses for example. Single parents should have a life insurance policy as well, to ensure their child or children will be taken care of until they are old enough to support themselves.

If you are not certain that life insurance is right for you, or what an appropriate amount of coverage should be, please feel free to contact us. We’ll be happy to provide you with the advice, information, and free quotes to help you get started with no obligation on your part.