No dependents, plenty in savings, coverage through work…
…Do I need life insurance?
Life insurance is one of the most underutilized forms of insurance—yet it’s the only kind of insurance that everyone (yes, everyone) needs.
There is no shortage of different types of insurance policies out there. There’s home insurance, auto insurance, renters insurance, even pet insurance! Yet, very few of these policies are recommended for everyone. After all, there’s no need to carry homeowners insurance if you don’t own your home.
Life insurance is different. At some point, we’ll all eventually die. While there are no requirements for you to carry life insurance, everyone will ultimately benefit from it.
If you’ve never thought much about life insurance before or believe some of the most common myths about life insurance and assumed it wasn’t something you needed, keep reading. We’ll explore what life insurance is and answer the question, “Do I need life insurance?”
What Is Life Insurance?
Life insurance is a policy designed to pay the beneficiary/ies of your choosing after you pass away.
Life insurance is non-taxable and can go towards anyone or anything. Your life insurance can ensure your spouse is taken care of financially when you’re gone or act as an inheritance for your children. If needed, life insurance payouts can even go towards continuing education or specialized job training for your surviving spouse or children. You can even contribute it to your favorite charity.
You could go an entire lifetime without ever making a claim on your homeowners insurance, but the uncomfortable truth is that we’ll all pass away at some point. Looking at it through that lens, it’s clear that life insurance is one of the most valuable policies you can have.
Unfortunately, too many people have a hard time planning for their own death. Instead of acknowledging that uncomfortable fact, they tend to deny that they really need life insurance in the first place.
Do I Need Life Insurance…?
…If I’m Young and Healthy?
Waiting until you are old or sick to buy life insurance can be disastrous. Every year you wait will only make your monthly premiums go up. You also run the risk of being diagnosed with a disease that will make you uninsurable.
Buying your life insurance when you are young and healthy is a great way to keep your monthly premiums down. It’s far cheaper to insure someone in their 30s than someone in their 70s.
You can even secure life insurance for your children, which can be transferred to them when they get older. Getting life insurance when they are young and healthy can help ensure a lower premium and make sure that they continue to have coverage if they develop diseases like asthma, diabetes, or obesity, which could prevent them from being eligible for a policy later in life.
…If I Don’t Have an Income?
You don’t need to have an income to benefit from a life insurance policy. For example, take a stay-at-home parent.
Even though they don’t bring home a paycheck, they add tremendous value to the household. They take care of the children during the day, keep the house clean, and cook dinner every night, make the doctor appointments….
Losing them would mean that a daycare or sitter would have to be hired to watch the kids while the surviving parent is at work. A cleaning company might need to be brought in to clean the house. And food costs would go up because there’s no time to cook a meal at home, resulting in more take out during the week.
The family’s income might stay the same, but their costs have skyrocketed. Your family can use a life insurance policy to help offset these increased costs.
…If I’m Single With No Dependents?
Many people are motivated to look for life insurance when they settle down and begin raising their families. It’s much easier to deal with the unpleasant topic when you can look at it through the lens of “taking care of your loved ones” rather than “preparing for your death.”
But what if you don’t have anyone dependent on you?
Even if you don’t have dependents, life insurance has multiple benefits. It can help pay for your funeral expenses, which are often thousands of dollars. That’s money that your nieces, nephews, and/or siblings could be stuck with—even if they aren’t your dependents. Also, any outstanding debt you have wouldn’t simply go away upon your death. Those debts have to be paid for by your estate, which a life insurance policy can fund.
If nothing else, a simple life insurance policy can provide some peace of mind knowing that nobody else will have to carry a financial burden because of you. And any leftover funds can be donated to a charity that you value.
…If My Employer Offers Coverage?
Sometimes, companies will offer group term life insurance to their employees. While this can be an excellent benefit from your job, the chances are good that the coverage isn’t enough for what you need.
The fact is that when you are on a company’s life insurance plan, you don’t have enough control of your coverage to be considered fully protected. Additionally, you will likely lose your life insurance if/when you leave the company. Or your employer could simply choose to stop offering the coverage.
If nothing else, you should at least consider a supplemental insurance plan to ensure you have the right amount of coverage and are protected from unexpected gaps in your insurance.
…If I Have a Lot of Savings?
Having a lot of money saved doesn’t necessarily mean you don’t need a life insurance policy. The only way to know for sure is to try and determine how much money your dependents will need in the event something happens to you. With the quickly rising costs for necessities like food and housing, that nest egg might not go as far as you would like.
There are also tax implications. Many funds—like a 401(k)—are considered to be a taxable part of an estate, but a life insurance policy is not. Life insurance can be a cheap way to have an inheritance passed down to your beneficiaries that is tax-free.
In nearly every situation one can find themselves in, the answer to “do I need a life insurance policy?” is almost always “yes!”
The great news is that getting the proper amount of life insurance for your needs is more affordable than you might think. And the earlier you get it, the cheaper it will be.
Contact us today here at Harry Levine Insurance so that we can make sure that you have the proper amount of life insurance for you and your family.