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Various Situations in which Life Insurance can be the Most Beneficial for You

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Life insuranceWhen it comes to life insurance, the usual dilemma almost everyone faces is that whether I need life insurance or not. Well, although seemingly it doesn’t benefit you while you are living, life insurance is essential for almost everyone. There are reasons for that.

Life insurance has evolved tremendously over the years and hasn’t remained something that benefits your family after your death, but has become a viable option for making tax-free investments or creating wealth.

You may have several questions about life insurance such as whether it is only for those who have a family to support or when should you purchase life insurance. Hopefully here we can find answers to all your questions about this most sought-after type of insurance if you are feeling daunted.

Do You Require Life Insurance If You Don’t Have Any Dependents?

Yes! It’s because you may see some instances in your life when insurance may be beneficial to you even though you don’t have any dependents. The most primary part of this would be covering the expenses of your own funeral. There are several other reasons as well. The following guidelines will help you decide whether life insurance is right for you.

Life insurance for covering funeral expenses

When Should You Buy Life Insurance?

The first and foremost thing you should remember is that the younger and healthier you are, the less expensive the life insurance will be.

The best choice of life insurance for you will be based on:

  • Your reasons for buying life insurance (to provide for your family, to protect your assets or to build wealth)
  • In what situation are you?
  • What stage of life you are in at present (are you in school, are you getting married, are you starting your business, are you buying a home, are you planning to or already have kids, and so on)
  • What’s your age?

Various Circumstances when Life Insurance will be Beneficial for You

You are never too young or too old for buying life insurance. In fact, you can buy it for various reasons at various stages of your life. Here is a list of instances when buying it will be of a great help to you. From this, you will come to know perfect timings of buying life insurance and can decide whether you need it or not, or whether you need it right now or in the future.

A life insurance representative or financial advisor can help you too to understand various life insurance options. Taking advice of these professionals can always be of help to make the right choice.

Starting a Family

If you are planning to start a family, you should buy life insurance. You will get lower rates now than when you will get older and your children in the future will depend on your income.

Life insurance for Starting a Family

Young Single Individuals

The reason for a single adult to buy life insurance would be typically to pay the costs of their own funeral or if they support an elderly parent or any other person they may take care of financially.

You may also think of buying life insurance while you are young because then you don’t have to pay more due to your increased age when you will need it. The more your age, the costlier life insurance will become for you and you are even at risk of being refused if you come across the medical examination.

However, if you have other sources of paying for your funeral and have no other people depending on your income, life insurance won’t be essential for you.

Having an Established Family

Another situation in which you need life insurance is when you have a family depending on you. Such a family isn’t necessarily the partner or spouse working outside the home. The person working in home also needs life insurance. The costs of substituting someone to perform domestic errands, childcare and home budgeting can lead to substantial financial issues for the surviving family.

Life insurance for an Established Family

Homeowners and Individuals Having Mortgages or Other Debts

If you decide to purchase a home with a mortgage, you will be asked whether you wish to buy mortgage insurance. Purchasing a life insurance policy covering your mortgage debt would safeguard the interest and help you evade the need of buying extra mortgage insurance while purchasing your first home.

Life insurance is possibly a way to ensure that your debts are paid off when you die. If you die having debts and there is no way for your estate to pay them, your dependents will lose your assets and everything you worked for during your life to pay off the debt and they won’t get it for their survival.

Life insurance for Homeowners and Individuals Having Mortgages or Other Debts

Working Couples Having No Child

This is a situation in which both the individuals would have to decide whether they would want life insurance. If both of them are bringing an income to home that they find comfortable to live on alone should their partner pass away, life insurance may not be required except if they want their funeral costs covered.

However, perhaps in some situations one of the working partners contributes more to the income or is planning to upgrade the financial position of their spouse, life insurance could be a viable alternative as long as it doesn’t become a financial burden. If you are looking for a low-cost life insurance alternative, you can consider term life insurance or look into first-to-die life insurance policies in which you pay for only one policy and the death benefit is given to the first to die.

Life insurance for Working Couples Having No Child

Purchasing Life Insurance on Your Parents

This is not considered as a strategy by most people. However it has been used and can work excellently. Life insurance on parents ensures a death benefit for you if you are a beneficiary of the policy. If you pay their premiums, you want to ensure you make yourself a permanent beneficiary so that your investment is secured. Thus when your parents die, the amount of policy is secured for you. It may be a decent investment especially if you do this when your parents are young enough.

You also have an option to protect your own monetary stability and it is to purchase long-term care for them in addition or suggest them to get one. Typically when parents fall ill when they get older, the expense of treatment and medications becomes an enormous burden for children. Thus these two options may offer you the financial cover that you might not have thought of otherwise.

Purchasing Life Insurance on Your Parents

Life Insurance for Children

Most people are of opinion that life insurance is not needed for children since they don’t have any dependents and in the event of their death, though it would be shattering, life insurance would not be helpful.

However, there are reasons why you should buy life insurance on your children. Here they are:

Children’s Illness: Some children are at a higher risk of getting ill due to hereditary reasons. If you are worried that eventually it may make your children uninsurable further in life, you could consider purchasing life insurance for your children so you won’t have to worry about failing in medical exams later when they will need life insurance for their own families.

As a Saving: Life insurance can also be purchased for children so as to help them when they will reach early adulthood to start their life. A permanent life insurance policy may be a very good option to build savings for children and offer them an opportunity to have a life insurance policy paying for itself when they have their own family or if they want to spend some of the savings for a major purchase.

Death Benefit: Even if it may sound terrible to think of your children’s death and if something bad happens to them, it would be definitely devastating for you, it’s a bitter truth that death also brings financial expenses along with the sadness. In such a condition, a life insurance policy on your children can pay off their funeral costs.

For these reasons, you may want to consider life insurance for your children as a practical option.

Having Life Insurance at Work

If you have obtained life insurance at your work, you need to purchase a separate and your own life insurance policy. There is a reason you must not depend only on the life insurance at work and it is that the job may be lost or you may change it. In that case, you lose the life insurance policy. Leaving your life insurance at your employer’s hand is not strategically sound. Life insurance will also become more expensive with the increase of your age. It’s wise to buy at least a small backup policy to ensure that you have some life insurance even though you lose your job.

Having Life Insurance at Work

Business Owners and Business Partners

If you own a business or are a partner in a business and have people dependent on you, you should consider buying a separate life insurance policy for fulfilling your business obligations.

So, if you were considering life insurance as an unnecessary thing to have, you might change your opinion now as most probably you will fit in one of the above categories and life insurance will benefit you.

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