Do I Need Life Insurance?

Most single people typically do not consider the need of insurance coverage unless they are providing financial support for their family, or they have significant debt they are reluctant to pass on to their family members. If you have loved ones who depend on you financially, an insurance policy is necessary to secure their financial future in the event of an unexpected health issue or accident. And, if you have plans for marriage or starting a family, then buying life insurance at an early age is much more affordable and allows a coverage base for your future.

Single people should take the potential of deteriorating health and other sudden unforeseen afflictions into consideration when determining whether or not an insurance policy is necessary for their specific situation. The knowledge that incurred debt would end up being taken on by your loved ones, should also prompt single individuals to seek coverage to protect their family.

Married couples - with or without children - often find that having a policy in place is necessary to protect what they have worked for and so they can continue to provide for their loved ones in the future. For richer, for poorer, in sickness and in health, insurance is a necessary part of any financial plan. It is possible that your family's future would alter with the sudden death of a loved one, and it's important to plan for unforeseen situations that may affect you or your loved ones' financial stability.

It is important that married couples ask themselves the following questions when determining their need for coverage:

• Would your spouse's income alone provide support for ongoing living expenses?
• Would your financial plans for the future be realized or diminished by your untimely death?
• Would your spouse be able to cover your final expenses? (e.g., funeral costs, medical bills, taxes, household or business debts, legal fees etc.?)

You and your spouse may decide that being a stay-at-home parent is an attractive option. However, providing around-the-clock childcare and managing the day-to-day household activities equates to valuable services that in the event of your death would otherwise require added financial costs. Your life insurance coverage ensures that your family will be able to have childcare and household management if you are taken from them.

Raising a family on your own, as a single parent, requires you to be twice as responsible for your family's wellbeing. Your day-to-day responsibility is to ensure that the kids are healthy, happy and performing well in school. Your long-range goals for them may include paying for college and any unexpected medical bills. This is when insurance becomes a necessary resource to rely on. It allows your family to maintain all its advantages throughout their lifetime without compromising the day-to-day care provided to them today.

When you are your own boss, you need to be responsible for a number of things. One of those concerns is how to protect your business in the event of your death, the death of one of your business partner, or key employees. There are many different policies that can benefit business owners, for example:

A buy-sell agreement ensures that the remaining business owners have the funds to buy the company interests of a deceased owner at a previously agreed upon price. The owners assume the business interests/shares and the family gets the financial proceeds from the buy-out.

A key person insurance provides owners of a business with the financial flexibility to protect their company's solvency in the event of losing a key employee or founder.

It is important to prepare for retirement by ensuring that everything regarding your estate is in order. Peace of mind during your retirement allows you to enjoy all the sacrifices you have made in order to reach your golden year goals. You may wish to leave your hard-earned legacy for your family behind. A life insurance policy allows your family to take care of estate taxes, final expenses, and other debts down the road. Additionally, the proceeds are generally income tax-free and can be structured to avoid probate, mitigating further estate tax liability.

There may be a sense of financial freedom when you reach the stage in life when your children have moved away and are supporting themselves. You may even own your home, free and clear of any mortgage payments. This is the time when you are looking forward to your nearing retirement. Although you are in a positive and exciting stage in life, there are compelling reasons for you to seek added coverage. Not only does a good insurance policy provide for unexpected medical bills, but it also provides financial support when a spouse passes away suddenly. A family's retirement plan savings and social security may not always cover living expenses to accommodate your surviving spouse and dependents for the next 10, 20 or even 30 years.