You’re young, healthy, play sports once a week and have a great diet; therefore, life insurance probably isn’t the first thing on your mind. If there are people dependent on your young life, it’s time to get serious about this area of your finances. In case you didn’t know, life insurance can protect your family and replace income should the worst happen to you. Perhaps you have a child, spouse, or even a parent dependent on your income? If so, life insurance is essential.
Despite the skepticism that surrounds life insurance, its primary function is replacing income. Financial planners all over the country will tell you the same, and this income replacement is vital (unless you’re one of the few with a bank account holding enough to satisfy dependents for life!).
Should you have life insurance? Here are four of the most significant signs that you should invest in this area immediately!
You Have Income-Dependent Plans with a Spouse
You might think that children are the biggest factor affecting this decision, but life insurance can also protect a spouse if you have plans that depend on both your incomes. For example, this could be paying for a home, planning retirement, or even something simple like meeting living expenses. If you and your partner are dependent on each other in this way, get life insurance to ensure they don’t struggle if you were to pass away.
You Have Children
As mentioned, this is the most common factor affecting life insurance, and everybody with children should have life insurance. As a mother or father, we’re assuming your children are dependent on your income. What would happen if this income were to disappear? It’s a scary thought and one that often encourages action from parents.
Even if you’re expectant parents, there’s no reason why you can’t get coverage in place early. The younger you are, the cheaper the coverage (because of the provider’s lower risk). When it takes two incomes to meet desired living standards, it makes sense to cover these incomes with life insurance.
You Own a Home (Or Have Another Large Debt)
Although we don’t like to think about death, somebody will be responsible for your debts or home payments after you pass. If you’re making mortgage payments every month, will your family have the assets to afford these payments if your income suddenly disappeared? If not, life insurance is a necessity.
We understand that selling the home is an option, but this means uprooting your family and forcing them into lower living standards in what is already a difficult time. With the right level of insurance, the coverage should help with mortgage payments, and your family is in a position to continue living as you wish.
While a mortgage is the most common example, life insurance can help with all types of debt. For student loans and credit cards, these debts will remain even after you die.
You Earn Income
Lastly, life insurance isn’t always necessary for those already living off savings in retirement. Unfortunately, this is one of the few times in life that there’s the safety net of cash available for remaining partners and family members. If you’re earning income and aren’t yet in retirement with this cash cushion, life insurance is a wise move.
Let’s not forget, life insurance doesn’t have to be a huge investment. For the amount of protection that it provides, paying a few dollars each week offers peace of mind that the family will have the support they need after we die.
If you fall into any of these categories, now is the time to buy life insurance for yourself and your family.