If you pass away, who will suffer?
Life insurance protects your loved ones when they are most vulnerable. When thinking about replacing income for the benefit of dependents, it’s important to consider who depends on you — and what will happen if you’re gone. Here are some examples of loved ones to consider.
The main wage earner in the family should definitely have a life insurance policy that replaces their income until the kids are out of college.
In many cases, an employer offers some sort of subsidized life insurance policy, but it’s a good idea to pursue insurance that isn’t tied to a specific employer so the policy remains in force even if the job goes away.
The life insurance can not only provide replacement income, but also do things like (i) pay off your mortgage, (ii) pay off any outstanding debts, (iii) pay for your children’s college tuition, etc.
While all parents of young children should have life insurance, there’s one group that may be the most often overlooked when it comes to purchasing these policies.
Since stay at home parents don’t usually contribute income, many families don’t consider how it would affect the surviving spouse and kids if they die suddenly.
Hiring a full-time nanny costs between $30,000 and $40,000 per year in many parts of the country. Add a full-time housekeeper to the mix and there’s a huge financial need when a stay at home parent dies.
Small business owners often fail to recognize the financial impact their death would have on their partners and even their employees. Life insurance can help mitigate that impact and maybe even save the business.
Business partners should discuss purchasing life insurance policies with each other as beneficiaries to help the business survive without having to downsize or fire valuable employees.
Single people who have a lot of debt should have a life insurance policy to cover those expenses, even if no one depends on them financially day-to-day.
No one wants to leave their family with tens of thousands of dollars in student loans, credit card debt, or a big mortgage to deal with. Having a life insurance policy that will cover those costs and in addition to funeral costs keeps family members from enduring financial hardship.
Funeral and burial costs in America average $10,000. Even a small term life insurance policy with a very low premium could save friends and family from struggling to pay those bills.
After determining who, if anyone, will suffer financially upon the death of the person in question and how much life insurance is required to care for the survivors’ needs, it’s important to consider another question.
There are a few situations where life insurance is definitely called for.
If you fall into any of these categories, you should get life insurance right away:
While married people and people who care for children or elderly relatives are the most in-need of life insurance policies, there are other groups of people who also need this important financial asset.
If you’re interested in learning more about life insurance with Ethos, you can get started by filling out a few questions to get a quote.