Affordable Life Insurance Protection for Your Family

Who Should Purchase Life Insurance?

The term "life insurance" may seem complex, yet it serves a simple purpose - to offer financial protection to loved ones in the unfortunate event of the policyholder’s death. However, the question often remains, "Who should purchase life insurance and why?" We're here to answer this question and provide context on the reasons why certain individuals or groups might need this coverage.

To begin, one of the common misconceptions is that only the elderly need life insurance. This is simply not true. Young adults, especially once they start earning a steady income, should consider purchasing life insurance. It is usually less expensive at this stage of life, and the acquired coverage can substantially aid in paying off debts like student loans in case of an unexpected demise.

For those who are married, life insurance becomes significantly more important. If one partner passes away, life insurance can replace the lost income, helping the surviving partner maintain their lifestyle and cover any outstanding debts.

Start Your FREE Life Insurance Quote

When a couple decides to start a family, life insurance becomes all the more crucial. For parents with dependent children, having a life insurance policy translates into ensuring secured future education and lifestyle costs, even in their absence.

Even for single parents, a life insurance policy ensures their children are provided with financial security and stability, especially during the formative years.

Adults who financially support their elderly parents, siblings, or anyone else should also think about life insurance. Their sudden death could impact those dependents significantly. Adequate life insurance coverage can help cushion this loss.

An often overlooked group who should purchase life insurance are homeowners. If there's any outstanding mortgage, the benefits from a life insurance policy can help pay it off, preventing the family from losing their home.

Those experiencing a significant increase in income, like a job promotion, may need to revisit their policy as well. The rationale here is simple – the higher your living standards, the greater the financial impact on your dependents if you were to pass away suddenly.

Many misunderstand that life insurance becomes irrelevant after retirement. On the contrary, retirees may still have outstanding debts, taxes or final expenses that their savings or pensions can’t adequately cover. Life insurance can cover these costs, preventing any potential burden on the family.

In essence, the question is "Who should purchase life insurance and why?" This understanding forms the backbone of a sound financial planning strategy.

Top 10 Reasons to Buy Life Insurance

We can break down some prominent reasons into our "Top 10 reasons to buy life insurance".

Covering Final Expenses
Replacing Income
Maintaining a Lifestyle
Paying Off Debts
Protecting Business Investments
Ensuring Family Members Continue to Have Quality Lifestyle
Supporting Charities
Paying for Children's Education
Supporting Aging Parents
Creating an Inheritance / Legacy

Life Events That Create a Need for Life Insurance

Life events that trigger a need for life insurance are common and can occur at any stage in life.

Engagement
Marriage
Starting a Family
Adoption
Purchasing a New Home
Securing a Job Promotion
Legal Guardian for Family Member
Divorce
Retirement
Planning for Final Expenses
Death in the Family

Choosing a Life Insurance Plan

It's important to understand that there are different types of life coverage for differing needs.

For example, term life insurance is a cost-effective option for young adults looking for coverage over a specific period, like until their children finish college.

Whole life insurance is a good fit for those who want to create a tax-free inheritance or financing estate-planning strategies. While more expensive, it provides coverage for life, along with a cash-value component that can grow over time.

Universal life insurance offers flexibility, allowing policyholders to increase or decrease their death benefit, or adjust their premium payments within certain limits. This option might suit individuals with varying financial needs over their lifetime.

To summarize, life insurance is not just for one demographic, it’s for any individual who has financial responsibilities or dependents. The stages that trigger a need for life insurance ultimately translate to anyone who wishes to ensure their loved ones or dependents are financially secure in their absence.

For those still asking, "Who should purchase life insurance and why?" it’s advisable to discuss your financial situation and responsibilities with a financial advisor or insurance agent. They can guide you on the best type of policy for your specific situation.

Finally, it's helpful to talk to family and friends who've purchased life insurance to understand their reasons and experiences. Often, their insights coupled with professional advice can best equip you to make an informed decision that will provide the much-needed financial protection for yourself and your loved ones.

Life Insurance Quotes

Top Pick – JRC Insurance Group

JRC Insurance Group helps you shop, compare and save on life insurance. Regardless of your age or health background, we'll shop our 50+ life insurance companies and find you affordable life insurance you need to protect your family and fit your budget. Compare the best life insurance rates for savings up to 73%. Get Your FREE Quote.

Highly Recommended – Globe Life Insurance

Get FREE Information On How $1* Can Buy Up To $100,000 Globe Life Insurance For Adults Or Children

No Medical Exam – Simple Application.
No Waiting Period. Buy Direct.
Rates As Low As $3.49 Per Month.
The Globe Life Family Of Companies Has Nearly 17 Million Policies In Force.
No Phone Required. No Credit Required.
The Globe Life Family Of Companies Has Over $224 Billion Of Coverage In Force.
Globe Life Is Rated A (Excellent) By A.M. Best Company As Of August 2023.

Do I Need Life Insurance?

The quickest way to know whether you need life insurance is to ask yourself one question: Would your death have a financial impact on the people in your life?

If the answer is Yes, then you may want to consider life insurance.

Life insurance is a contract between you and an insurance company. You pay insurance premiums in exchange for coverage. If you die while the policy is in effect, the insurer pays out a death benefit to your beneficiaries. In most cases, this payout is equal to the face amount of the policy — so if you have a $500,000 policy, your beneficiaries will receive $500,000.

Life insurance beneficiaries — who could be your spouse or dependents, for example — can use the money to cover their financial needs, whether that’s paying household expenses or covering debts.

Who Needs Life Insurance Protection

Income Earners

If your spouse or partner relies on your income to help pay the bills, your death could leave them without a way to support themselves and maintain their lifestyle. The death benefit payout from a life insurance policy can help them cover their monthly living expenses and pay off large debts like a mortgage loan or auto loan so they can maintain the lifestyle they’ve grown accustomed to.

Stay-at-Home Spouses or Parents

Even if you don’t earn a traditional salary from a job outside of the home, you may still need life insurance coverage. Stay-at-home parents and spouses provide services that can be very costly to replace, such as cooking, cleaning, grocery shopping, running errands, and childcare. A life insurance death benefit payout can help your partner pay for these services during a difficult time.

Parents or Grandparents with Dependents

Your minor children, unable to financially provide for themselves, could be put at a major disadvantage if your income was no longer there to provide for them. The same is true if you help pay the cost of a college education or provide funds to support someone with a disability. A life insurance policy can help cover these costs during the years that your dependents rely on you for financial support.

Owners of a Small Business

Your business might struggle if you were to die, especially if you’re integral to the daily operations of your business – a Key Employee. A life insurance payout can help your business partners or heirs cover a variety of expenses, such as buying out your share of the company, covering monthly office rent, and hiring additional employees to help in your absence upon your passing.

Pay for Final Expenses – Burial and Funeral Costs

According to the National Funeral Directors Association, the median cost of a funeral with viewing and burial is $8,555 in the USA. However, depending on your specific wishes for your funeral, it could cost more. With a burial life insurance policy, you could pay your own way, planning ahead by purchasing coverage, which would keep the financial burden off your loved ones responsible with handling your final wishes.Co-Signers or Co-Owners of Debt

In most cases, debt does not pass on to other people. However, if another person co-owns or co-signs the debt, they could be left holding the bill. Spouses in community property states such as California and Texas may also be responsible for outstanding debts, even if they’re not co-owners or co-signers. You can use life insurance to cover your debts if other people would be responsible for them, helping to pay them off in your absence. In addition, your parents may be co-signers of your student loans for college, or your auto or home loans.

Who Doesn’t Need Life Insurance?

If no one in your life would be financially burdened by your death, or no one relies on you for any form of financial support, you can likely put off buying a life insurance policy. For now, you may find that saving and investing your money in other assets is a better move.

Remember that the younger and healthier you are, the more affordable life insurance is. If you see major life changes on the horizon, such as marriage or children, it may be worth exploring your options to lock in a good price on life insurance at the right time. It’s a good idea to compare life insurance quotes from several leading life insurers to find the best possible coverage at the lowest price.

What Type of Life insurance Do I Need?

Typically, life insurance falls into two categories:

Term life insurance is temporary — it lasts a set number of years, such as five, 10, 15, 20, 25, 30, 35, or 40.
Permanent life insurance typically covers the insured person until the end of their life and includes a cash value component from which a loan may be taken in the future, if needed.

Both types of life insurance come in different forms, with different benefits and levels of coverage.

Note: Permanent life insurance usually costs up to 5-10 times more than the same amount of term life protection.Term Life Insurance

Term Life Insurance

In most cases term life is by far the more affordable and flexible option, and thus it's the better choice for most people. You can tailor term insurance to cover the years of your life when your death would most affect your loved ones, and then reassess your insurance needs, when they are able to financially support themselves.

Permanent Life Insurance

There are some situations in which permanent insurance makes more sense, particularly if you want the policy to pay out regardless of when you pass away. Types of permanent policies include whole life and universal life. Whole life insurance is the most common type of permanent coverage, offering fixed premiums and guaranteed cash value growth over time. Universal life insurance is more flexible, offering adjustable premiums and death benefits.