Many families depend on two incomes to make ends meet. If you died suddenly, would your spouse have enough money to cover your funeral costs, credit card balances, outstanding loans and daily living expenses?
If someone depends on you financially, you probably need life insurance. Here are some examples of specific life stages or life events that might trigger the need for additional life insurance.
Raising a child is one of the most rewarding things a person can do in life. But it’s also one of the most expensive. If you had died yesterday, would your spouse have the financial security to provide your children with the opportunities you always dreamed they’d have? From diapers to diplomas, would there be enough income to pay for daycare, a college education and everything in between? Even parents who don’t work outside the home need life insurance because they provide services that would be expensive to replace, such as childcare, transportation and household chores. And what about single parents? They need life insurance more than anyone because their children rely on them for everything.
For most people, your home will be your most valuable financial asset. Life insurance can be used to repay the outstanding home loan, sparing your family the need to move to a cheaper property.
If you’ve recently been promoted or changed jobs, it’s a good time to re- evaluate your life insurance coverage. Why? You may not realize it, but when your income rises, your spending tends to rise, too. Updating your life insurance coverage can help ensure that your family would be able to maintain its new and improved lifestyle if something were to happen to you.
If your children have left home and your home loan is paid off you might feel your need for life insurance has passed. But if you died today, your spouse could outlive you by 10, 20 or 30 years. Would your spouse have to make drastic lifestyle adjustments to make ends meet? Adequate life insurance coverage can help widows and widowers avoid financial struggles in retirement.
Most single people don’t have a pressing need for life insurance because no one depends on them financially. But there are exceptions. If you’re providing financial support for aging parents or siblings, or if you’re carrying significant debt you wouldn’t want passed on to family members, you should consider life insurance.