Why Do You Need Life Insurance?

By Frank Topol

Life insurance has long been regarded as one of the most important purchases that a consumer will ever make, but there is a lot of confusion associated with determining who needs a policy and who doesn't. The truth of the matter is that contrary to popular belief, practically everyone has some sort of a need that an appropriate amount of coverage could fill.

Parents with young children are perhaps the most obvious category of consumers in need of adequate life insurance. Any consumer that has dependents needs to ensure that they have made sufficient arrangements to support them in the aftermath of a tragedy. An appropriate level of coverage will include budgeted amounts for education, housing, childcare, and other usual expenses associated with raising children.

Many consumers often retain life insurance policies simply because of their status as borrowers. Individuals owing money are often advised by their lenders and financial professionals to seek coverage that will pay off their debt in the event of their demise. Such life insurance policies are particularly useful with larger obligations such as auto loans and mortgages.

Children are most likely not financially supporting any dependents, but it is still important for kids to have a sufficient level of life insurance coverage. Funeral and burial expenses can be incredibly high, and many parents find themselves financially unable to cover these costs at unexpected times. Ensuring that children are appropriately covered will help alleviate some of the stress associated with planning a funeral.

Elderly individuals often seek insurance policies that will enable them to create an estate to leave for heirs. Many senior citizens are debt free and are not actively supporting any dependents, but may not have a substantial amount of savings to leave to children or grandchildren. An appropriate level of life insurance coverage will allow a desired amount of money to be paid tax-free directly to a beneficiary.

Many individuals avoid purchasing insurance policies because they believe that they really don't need them, but virtually everyone has some type of need that coverage can solve. Even if a person has no dependents to support, there are plenty of other reasons to receive a quote. Many life insurance premiums are based upon the age at which the policy was purchased, so it is often advisable to seek information as soon as possible and avoid the higher rates that procrastination will afford a consumer.

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