Who needs Life Insurance?
Life insurance is a requirement for anyone who has people depending on them in their life. The most common dependents people have are their spouses and children.
- Who needs life insurance?
- What if there are no dependents with you?
- When to buy life insurance?
- Should older people buy life insurance?
- What if you already have insurance from work?
Who needs Life Insurance?
It's a question that is always in our minds and to put it all into a clear picture, and we are going to explain the whole concept to you in a comprehensive manner. To give you the short answer, life insurance is a requirement for anyone who has people depending on them in their life. The most common dependents people have are their spouses and children who they have to raise and take care of until they become self-sufficient. However, when buying a policy, they can nominate other people too who are not their family like your parents who may be aging and unable to support themselves, your charity or any other possible person or organization.
The whole concept of insurance focuses primarily on young people and families. At a young age, people decide to do everything they can to make sure their families are provided for after they die. Most young families rely on the salary of the family head as their major source of income to meet their expenses. That specific amount of money provides all the things that you need to take care of your dependents' needs. And in case you pass away early, your family needs life insurance for their future and wellbeing to be taken care of already. That's where life insurance comes in, and for most, their insurance payout is usually sufficient for 5-7 years after their death.
What if here are no Dependents with You?
Whenever you ask yourself, “How much life insurance do I need?" you also need to ask a much more important question; “Do I even need life insurance for myself?” The answer to that question may seem like an obvious no to most people, but that is not the case since individual insurance without having any dependents is not only common practice but also common sense. Once you die, you need to cover several significant expenses like funeral costs and other matters like debt that may need to be settled.
A lot of individuals, especially young people, are now buying life insurance policies for themselves because they are actively thinking about providing coverage after retirement. You don't need to be dead for your insurance to become claimable. If a person survives long enough and their insurance period lapses, the big payout that comes at the end would provide them with sufficient funds to last quite a few years on their own!
When to Buy Life Insurance?
It's is a pretty straight forward question that does not need any technical details. The simple answer is as soon as you possibly can! The policy that you choose will have monthly or yearly installments called premiums, which you will need to pay to buy that specific policy. Starting at a young age means you will have technically more years to go through until the payment period is complete and the policy matures. A more extended payment period means you will be able to divide the cost into more installments, thereby decreasing the premium amount significantly!
Probably the ideal candidates for purchasing life insurance are young families who are still in the stages of development. Because the parents are still young, they can acquire a decent policy while paying a price that is also quite reasonable. They should not only think of their future but the future of their family members as well, especially the kids who depend on them entirely for at least the first 18-20 years of their life.
New parents with budding careers may be too busy to handle the long and tedious process of sitting with insurance agents and buying a policy. Thankfully, with platforms like Emma, there is a lot of ease provided to new families in terms of purchasing a policy. You do the whole process online, and you do not need to be there physically to buy a policy. Without even getting off your comfy couch, you can find all the answers that you are looking for on the website!
Insuring your Parents
This may seem like an odd thing to suggest whenever someone comes with the question; How much life insurance do I need? However, it is actually a very prudent step and can be very beneficial to both the parents and the children. In case of the death of the parents, the child can be the irrevocable beneficiary of the policy and benefit from the payout.
You can also acquire a policy for your parents at an earlier stage, which would cost a lot less and help you later with keeping the expenses down for providing professional health care for your parents when they need it in later years. When it comes to long term care, the amount of expense that happens is quite a lot and having an insurance policy like this can come handy when making payments.
Life Insurance for Children
Whenever you ask “how much life insurance do I need” to get for my children, you will always get the same response, i.e. children do not have any dependents, and it is, therefore, useless to get insurance for them. However, there are many situations where it could become necessary for parents to get insurance for their children as well. Some of these include the following:
- If there is a chance for the child to develop some severe illness that runs in the family. Life insurance can be beneficial here, not just as a protection for the child but also as a guarantee that once the child has his own family, he would already have his life insurance
- Life insurance for children is often given as a gift as well. It acts as a financial stability plan for the child, i.e. when they get older, they can withdraw the money for dealing with their own expenses. This kind of policy can work as an excellent benefit for later life and also motivate them to buy their own life insurance policy when they become independent.
- Another very common reason for getting insurance for your child is to get a death benefit in case something happens to the child. Raising kids takes a serious hit on family finances, and if your child dies early, you might want to cover for the expenses you have already done and also cover the funeral cost.
Should older People Buy Life Insurance?
The concept behind the pricing is quite simple; the higher the life expectancy, the cheaper the policy. For people who are old, getting a policy can be quite expensive as they are no longer at the prime of their life, and insurance companies want to recover maximum premium in minimum time, given the life expectancy of older adults!
That still does not mean older people should not buy life insurance at all. If you have the money to pay for a policy, then it is certainly a good idea to put that money to use and get an insurance policy. The payout could, at the very least, help out with your funeral expenses and settling debts, if any.
What if You already have Insurance from Work?
Nowadays, many employers attract talent by offering life insurance as one of the benefits. If you have a life insurance policy from your employer, you may be inclined to feel a bit relaxed about your situation. However, you need to know that having a work insurance policy is not very effective in meeting your requirements in the future. The very first reason is the simple fact that since the employer is providing insurance for tons of people, they cannot pay big costs for everyone, so the resulting policy is often the cheapest possible option.
It would be best if you also kept in mind that your insurance policy with your company will only last as long as your job does (term life insurance with coverage until retirement/resignation). If for any reason, you have to leave your job, the employer will stop paying your premiums, and your policy will therefore lapse. Leaving such a thing at the mercy of your employer is, therefore, not a very prudent decision! Always make the smart move and get your own whole life insurance policy that you can manage yourself, regardless of where you are working. This way, you will stay worry-free for the rest of your life.
A Secure Future
Whatever the situation may be, it eventually boils down to a straightforward explanation that fits every type of scenario for buying insurance; secure future! This is for you, your spouse and children/other dependents. It is pretty safe to say that having life insurance is an absolute necessity for pretty much everyone! Whether you want coverage for a specific period and get term life insurance or want to go all the way and get permanent life insurance, you should definitely opt for at least one policy!