Life insurance was first created to support widows and children. It was designed to protect them from a terrible loss that would cause dire financial strain. Although its reach has expanded, its goal has remained the same. From providing surviving children an inheritance to paying off a mortgage for a surviving spouse, life insurance has been an incredible force for good. The protection it offers makes is essential for the nine types of people listed below:
Getting married and having a baby are such amazing experiences; but with the joy of a new baby comes a much greater degree of responsibility. Whether the mom or dad stays home, that’s one person who will have a “full-time” job raising the baby. If one spouse were to tragically die, it would be a huge burden for the survivor to carry on nurturing that child as well as having to generate income. A life policy is essential for a family starting out to protect the family from an unexpected loss.
As a family grows, the responsibility and income needed to support the children grows. More mouths means more food which means more money. It goes without saying, each additional child comes with more cost. And this cost means an increased need for insurance and also a higher death benefit for protecting the whole family.
Life insurance is not just for those with dependent children. It’s also important for a married couple if the death of a spouse would make it hard for the other to meet their financial needs. And in most cases, this would definitely be true for at least one spouse. Even if both spouses are making a decent salary, odds are your expenses (car, mortgage, living expenses) have increased to where both of your salaries are necessary to pay all the bills. So even wealthier couples would need life insurance in order to protect their spouse.
Older siblings can show tremendous love and care for their younger siblings by getting a life insurance policy for their parents. One of the worst things to happen would be for both parents to tragically die and leave their surviving children without a death benefit. If parents aren’t interested in getting a policy, the oldest child can make the wise decision of buying them a policy to protect their sibling(s).
Owning a business is a great privilege. Owners get to provide goods and/or services to others. They also get to employ people and give wages that support them. Sadly, all of this could end with the death of the business owner -- the business go under, leaving all the employees with no work. Getting a life insurance policy as a business owner is important to ensuring your business can continue (or be sold with benefits provided to employees) even after death.
Person with Debt
Dying with debt is all too common these days. And it can dramatically impact the inheritance someone was hoping to leave behind for those surviving them. The $20,000 car a father was hoping to leave behind for his son will be taken away if they have $62,000 in debt (that’s the national average!). A wife will need to pay up $62,000 for the $400,000 house that’s already paid off in her husband’s name. And while debt is paid off by the estate, debt can’t touch the death benefit from a life insurance policy. This is why it’s important for those in debt to buy life insurance. It will provide those surviving you with a concrete inheritance that can’t be taken by debt creditors.
Employee Covered through Work
A common way people get a life insurance policy is through their work. Their company provides it as an employment benefit. And while it is a great gesture by an employer, an employee shouldn’t rely on it for two reasons. One, it often only covers a year of salary. While that might sound great, a surviving family or spouse will probably need much more than that to help get their feet back on the ground. Second, people don’t always stay at the same company. For unforeseen reasons, one might be fired, laid off, or quit. And then what would happen to the policy? You are given 30 days to convert the policy or else it is dropped. And with the stress of losing a job and searching of the next position, most policies don’t get converted. Either its forgotten or pushed to the side for saving money. For an employee given life insurance through work, having a separate policy will provide comprehensive protection.
Adult Caring for Elderly Parents
Dependents are not always younger; they can be much older in age! There are many adults who financially support their elderly parents. These expenses may cover medical bills, assisted living, or funeral costs. It might be wise for these caring adults to purchase a life policy for their elderly parent(s) to compensate for some of the expenses. Ideally, the policy should be purchased when the parents are younger in order to get a better rate and ensure coverage. However, even one bought closer to death can be advantageous.
Most view buying a home as an investment -- they hope the value will increase and provide a source of wealth for themselves and their loved ones. However, most do not end up paying off their mortgage before death. The average mortgage debt at death is $48,600. In order to achieve your goal of generating wealth, getting an insurance policy is a wise decision.