When One Of You Is A Stay-At-Home Parent Or Full-Time Student
If you’re a stay-at-home parent or full-time student, life insurance can safeguard your partner from financial devastation. You may not be working, but you still contribute to the household in valuable ways. Would your partner be able to carry on while taking financial responsibility for your debts, your funeral and burial expenses, and the cost of caring for your children?
Your partner might be forced to hire a nanny, house cleaners, or a personal assistant to keep your home running smoothly. They might even pick up extra hours at work to make up for their increased living costs. Life insurance can cover these bases and more - while your spouse supports your family during a difficult time.
To calculate how much insurance you need, take into account your rent or mortgage, debts, and the educational needs of any children you support or may have in the future.
When You And Your Partner Don’t Have Children Yet
If you plan to start a family soon, purchasing life insurance can be a smart move. Choose an amount that will support the surviving partner and future children. Would either of you be able to take over each other's financial obligations?
If one or both of you have significant credit card bills, a mortgage, car payments, or student loans, it may be a good idea to purchase enough life insurance to pay off those debts. To help determine how much life insurance to purchase for each partner, you’ll need to calculate the potential financial impact that death would cause for the other. How much money would it take for each of you to feel financially secure without the other?
If you are responsible for the financial needs of anyone outside your household, you may need to provide an insurance benefit for them, as well. Your dependents could also include elderly or disabled parents and extended family members.
When One Or Both Partners Have Life Insurance Through Work
Many employers offer life insurance as part of their benefits package. It’s a nice perk and typically costs only a few dollars each month. But, there can be drawbacks to depending solely on this type of policy.
First, if you have employer-provided life insurance, it doesn’t always travel with you when you leave the company. Additionally, employer-provided insurance is rarely issued in the amount of recommended coverage. Consider additional coverage, such as a relatively inexpensive term life insurance policy independent of your employer to help ensure that you will have sufficient coverage during your wage-earning years regardless of your employee benefits.
Rates for all types of life insurance also increase as we age. If you develop a critical or chronic illness in the future, the cost of purchasing life insurance may be too high. You could even become uninsurable as a result of the condition of your health. If you already have a life insurance policy in place when you become ill, as long as you keep paying the premiums, you’ll be insured while the policy is active and in force, no matter how your health changes.
When You And Your Partner Don’t Need Life Insurance
Some of us are lucky and have enough money in savings to cover outstanding debt and funeral expenses, and may be able to skip purchasing life insurance. If your savings can provide for the future financial needs of your family, that is great! In that case, there’s really no need for a life insurance policy.
However, you likely have financial goals that aren’t already covered by savings, not to mention any dreams you would like your family to realize with or without you. If this is the case, you should consider the benefits of an affordable term life insurance policy.
Taking your next steps
Applying for term life insurance with Ethos is a simple way to help protect your family's financial future. Learn more