Thursday, September 3, 2020
6 Signs It’s Time For You to Get Life Insurance
As an adult, you may have a lot of financial
responsibility, such as repaying a mortgage, a student loan, repaying credit
card debt, or financing a retirement account. The last thing you want to do is
to fund a life insurance policy.
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But in what financial condition would you leave your family
if you died tomorrow?
While you may not want to think about it, death and taxes
are two things that are a certain life. "We will all die," said
probate planning lawyer Liza Hanks. "Being realistic, being able to think
about it is a really caring thing for the people you leave behind."
So if you want to secure your family's financial situation
when you and your paycheck are no longer there, it may be time to think about
life insurance.
Life insurance is generally a lump sum that the insurance
company gives to your beneficiary when you die. Life insurance can protect your
family financially. It can help pay your funeral expenses, mortgages, education
of your children or other expenses.
Use this life insurance calculator to see how much life
insurance you need.
6 Signs You absolutely need life insurance:
Although having a life insurance policy is a long-term
strategy, not everyone needs one. After all, financing life insurance can be
expensive. But if you have underage children and have people who depend on your
paycheck, you definitely need life insurance. So, if one of these below applies
to you, then you certainly need life insurance.
1. You are the breadwinner in your household.
If you're the breadwinner in your family, you'll need life
insurance to replace your paycheck when you're gone. With a life insurance
benefit, your family can cover the cost of living that your paycheck would have
covered.
2. You want to pay for your own funeral.
The average funeral costs between 7,000 and 9,000 US
dollars. That's a lot of money to put on your family's shoulders after you pass
away. To help your family cover the cost of the funeral, plan ahead and get
life insurance.
Annamaria Vitelli, Managing Director at PNC Asset
Management Group, said: "Life insurance can help protect your family and
protect them financially when you are not there to take care of them."
"In addition to supporting your family, life insurance proceeds can help
provide cash immediately upon death and take care of some or all of a
fraudster's debts, funeral costs, and income or inheritance taxes."
3. You are a homeowner with a mortgage.
Mortgage payments are perhaps your biggest monthly expense.
If your paycheck covers the entire monthly payment, or even part of it, you
still need life insurance so your family doesn't have trouble finding extra
money or leaving their home when you die.
4. You are divorced parents and pay child benefit.
If you are a divorced parent and are now paying child
benefit, you need life insurance so that your child still gets money that you
would otherwise have paid in childcare. Paying out life insurance would help
you with everyday expenses such as food, clothing, education for your children.
5. You are a stay at home parents.
If you stay at home, parents who take care of the children
and run the household while your partner goes to work also have to take out
life insurance, because if you don't have all the work you used to do in the
house, someone else needs to do it. A payment of a life insurance can help to
pay for things like childcare, a nanny, etc.
6. You and your spouse have little or no assets.
You may need life insurance if you and your spouse have
zero or very little wealth or passive income streams to take care of yourself
if one of you dies.
Suppose you're a lawyer or doctor who earns a high income,
say, 200,000 dollars a year. But you don't have passive income streams or
assets, you're only dependent on your paycheck to support your family. When you
die, the paycheck stops coming. Your family can face a financial burden without
your paycheck.
Well, let's say you own a hotel or apartment house and
collect rent monthly, money will still come even if you're gone. The
lawyer/doctor actively exchanges his time for a paycheck, while the business
owner passively earns his income.
So if you are actively trading your time for a paycheck
with no other assets, you should definitely carry a life insurance policy.
The conclusion...
Although not everyone needs life insurance, if your loved
ones are counting on you to take care of them financially when something
happens to you, you are definitely someone who has to wear one. But how much
life insurance do you need? Use this free life insurance calculator to find
out.
Talk to the right financial advisor
You can talk to a financial advisor who can review your
finances and help you achieve your savings goals. Find someone to meet your
needs with SmartAsset's free financial advisor matching service. You answer a
few questions and they suit you with up to three financial advisors near you.
So if you want to help develop a plan to achieve your financial goals, start
now.
this article is adapted from this