Necessary reasons for investing in life insurance
Life insurance is an essential way to ensure that your loved ones don’t face potential financial burdens if you were to pass away. This is one expense that needs to be seriously considered. It’s also important that your life insurance policy takes into account different circumstances, your unique lifestyle and needs. Each life insurance policy should be tailored to you, and to help protect the people you love. Below, you can learn about several reasons you might need life insurance.
1. Stay-at-home parents
Being a stay-at-home parent can be difficult, demanding but also very rewarding. If you are a stay at home parent don’t even think that you don’t have economic value. While you may not have a job outside, you have a very important job inside your home. In fact, by having a stay at home parent you are covering the costs you would incur if you were to have a traditional job, and also if you were to pass away. Along with the main breadwinner of your household, the stay at home parent should be covered with a term life policy, especially if your children are young.
2. Young parents
If you pass away, you still will have the responsibility of financially providing to your children, especially if your children are young. Planning ahead of time can ensure that your children will be able to pursue the like you would like them to have. They will need money to cover their expenses whether it is for extracurricular activities, school, or food, clothing and shelter. A long-term life insurance policy provides a way for you to provide for your children into adulthood.
3. Parents of teens
As your children get older, their living expenses solely decrease and eventually are eliminated as they move into adulthood. However, if your children are in their teens you have a new challenge—college. With the cost of education significantly rising every year, you will want to make sure their college will be paid for if you aren’t around to help. A term life insurance policy with high coverage can help financially back your children and provide them with funds to complete their degree. While not everyone pays for their children to go to college, a good rule of thumb is to make sure the coverage pays for at least an undergraduate education and living so you can set them up for success without debt after graduation.
4. Freelancers and consultants
Those in careers where they don’t have coverage through an employer also need life insurance. Plan to have some life insurance worked into your budget even if it’s to solely cover funeral and burial costs if you pass away. Also, a term policy that covers your funeral and burial expenses typically comes with low rates.
5. First-time homebuyers
Buying a new home is expensive but a very valuable asset to have. When you are entering into home ownership it’s important to consider what would happen if you passed away. Term life insurance can help make sure that your loved ones can continue to live in your family home even if you aren’t there to cover the mortgage payments. It’s recommended to have a policy that is equal to the outstanding balance of your mortgage and lasts as long as your mortgage terms.