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Life insurance can be used to pay
your debts and final expenses, provide
income for dependents or other loved
ones and for estate planning and gifting.
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
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 childs 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.
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