Do You Need Life Insurance?

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Usually, someone who is dependent on a wage earner or a caregiver, such as a child, spouse or elderly parent, creates a need for life insurance. To help you decide on your family needs, check your circumstances against the following situations.

• Families with children usually need life insurance.

  If both spouses earn income vital to the family, then both should be insured. When both spouses work, but income is limited, term insurance can provide adequate coverage less expensively. If this still exceeds the family budget, the couple may choose to adequately insure the primary wage earner first and the other when it is economically feasible. Or they may spread the risk with smaller policies on each spouse.

  In families where one spouse does not work outside of the home, life insurance may be necessary to replace services such as child care and housekeeping.

• Working couples without children or dependent parents must consider their lifestyle when assessing life insurance needs.

  Life insurance would be helpful to couples who spend most of what they earn, have significant outstanding loans and balances on credit cards, or who would not want their savings to be depleted if one spouse dies.

• Single adults can have a need for life insurance, especially if they are a single parent or supporting another individual financially. Another reason for coverage is if they have outstanding loans or want to protect their future insurability by buying life insurance while they are young and in good health.

• Children can be insured for very little cost. You may want to consider enough coverage to pay burial and final medical expenses and also to protect the child’s future insurability.

  An individual permanent life insurance policy on a child provides the most options and flexibility if a family can comfortably afford it. A relatively inexpensive "child rider" can be added to an existing policy on a parent to provide some term coverage on the child.