Life Insurance for Everyone?
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Life insurance is primarily designed to provide financial assistance
for your family and loved ones, after you die. An article, “Who
Needs Life Insurance,” by Bobbie Sage, located on the personal
insurance page of About.com, describes who exactly should get
life insurance coverage and why,
Sage dissects the level of need to have life insurance for six different
groups of people; children, beginning families, established families,
young single adults, non-child working couples and the elderly.
For the most part, children do not need life insurance. On extremely
rare cases, children having life insurance could be beneficial,
but it is basically useful since they do not provide for anyone.
Beginning families
should have life insurance. “Your rates will be cheaper
now than when you get older and your future children will be depending
on your income.”
Established families are in the highest
need for life insurance. “This does not include only the
spouse or partner working outside the home. Life insurance also
needs to be considered for the person working in the home. The costs
of replacing someone to do domestic chores, home budgeting and childcare
can cause significant financial problems for the surviving family.”
Coverage is already going to be more expensive than if you were
younger, but the sooner you get coverage, the sooner you save
If you are a beginning or an established family and are wondering
approximately how much coverage you should get, you should be covered
for about seven times your annual salary.
So, if you earn $60,000 per year, you should get coverage for $420,000,
to cover existing and future expenses. If you are not the primary
financial provider, you should estimate how much money would
be appropriate to provide for the rest of the family members.
The main reason young single adults should get life insurance is
to cover their personal funeral costs and anyone they are caring
for.
Non-child working couples may or may not want to get life insurance.
“If both persons are bringing in an income that they feel
comfortable living on alone if their partner should pass away, then
life insurance would not be necessary except if they wanted to cover
their funeral costs. But, maybe in some instances one working spouse
contributes more to the income or would want to leave their significant
other in a better financial position, then as long as purchasing
a life insurance policy would not be a financial burden, it
could be an option.”
Elderly people probably will not want to get life insurance if they
do not already have coverage. It is still an option though if they
are the sole provider for someone, such as a grandchild, or if they
want their funeral costs covered. “But, be aware that purchasing
a life insurance policy at this age can be very expensive. Before
doing so, first talk to a financial advisor or accountant about
looking into other saving options to pay for your funeral costs
before considering life insurance.”
There are reasons for and against getting life insurance. It is
not an investment, but rather protection for your family.
