Do I Need a Life Insurance Policy?

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  • Written By: wiseGEEK Writer
  • Edited By: O. Wallace
  • Last Modified Date: 11 November 2018
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Deciding whether you need a life insurance policy means understanding the economic impact your death would have on others. For instance, though it may be the case that a single person who is not supporting anyone else might not need a great deal of life insurance, there still must be some way to pay funeral and burial expenses, which tend not to be covered by death benefits you would receive via social security. It’s therefore important, even if you aren’t supporting someone else, to consider at least a small amount of coverage that would pay for funeral expenses in the event of your death.

It’s clearly the case that a married person supporting children or even just supporting a spouse does need life insurance. Consider how your spouse and children are going to be financially affected by your death. First off, grieving can mean time off work, and counseling for spouse and/or children. A person’s death can also dramatically change the ability of the surviving spouse to pay rent, buy groceries, save for children’s college funds, or continue to maintain the same standard of living prior to the person’s death. Don’t just consider the economic impact of your death for a single year, look at the spouse and/or children’s needs for at least five years past your death, possibly longer if your children are very young, to see how much will make your family comfortable and be able to go on without worrying over financial troubles.


Even if you’re a parent who doesn’t work outside or inside the home for pay, if you’re caring for children, you’re providing a lot of work that would otherwise cost money. Though you may not need a life insurance policy in the same amounts as would a working spouse, consider the costs that will arise in your absence. Housecleaning, childcare, transportation to and from school, and the like may all come at a heavy price if you’re not there. Create reasonable estimates of what services might be required, plus the cost of funeral expenses to determine how much life insurance you will need.

If your family is grown, you’ll still need a life insurance policy, especially to protect your spouse or the interests of children who might inherit your estate. Life insurance may be a way to help pay for funerals, to pay for capital gains taxes on property acquired, or to help settle debts so others can entirely inherit your estate without burden of debt. Children who are supporting elderly parents should also think how that support will be diminished, and probably need a life insurance policy too.

Single parents definitely need a life insurance policy, since the burden of caring for their children may be solely theirs. You do also have to take into account how much money you can leave your children. If you have significant savings, you may not need as much in life insurance. On the other hand, if you’ve accumulated very little in savings, try getting as much life insurance as you can to help pay for the continued care of children.

Most insurance companies would argue that all people need life insurance. However, if you have next to no debt, and enough saved to pay for funeral expenses, and have no one who depends upon you financially, you may not need very much, if any at all. It’s recommended that you take stock of your life and figure out who depends upon you, how great their financial need is, how much savings you have, and the impact of your death on those depending on you. If you don’t currently have more than enough to pay your debts and leave your family comfortable, then you definitely need life insurance.



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