Have you ever considered getting a life insurance policy or perhaps increasing the amount of coverage you currently have? The problem with life insurance is that there are several misconceptions surrounding the subject. Many people assume you only need it if you’re the breadwinner in a family with children, but this doesn’t even begin to cover all of the possible scenarios in which you might’ve wished you had life insurance beforehand.
To determine if life insurance is worth it for you, here are some reasons why you might need to take out a policy to protect your family and dependents against severe financial hardship in the event of your unexpected death:
You’re a Working Parent
This is the most obvious category, since your kids are completely reliant on you for housing, food, school supplies, clothing and other expenses. However, studies have shown as much as 75% of young working parents do not have any life insurance. This is scary — who will cover your family’s expenses if you unexpectedly pass away? It’s certainly an uncomfortable thought, but it’s something you need to plan for just in case the highly improbable (but still possible) scenario of your early demise occurs.
You’re a Stay-at-Home Parent
This may seem surprising to some people, but YES, stay-at-home parents definitely need life insurance policies. Why? Because they perform a ton of labor at home – child care, cleaning, cooking, bill-paying, etc. – and without them, the working parent would either have to stay home with the kids or pay for a costly nanny or daycare service (not to mention maids and other household help for particularly busy professionals who normally work the majority of their days outside of the home).
Just because a stay-at-home parent doesn’t make money from the labor they perform doesn’t mean it’s not invaluable to the financial stability and overall functioning of the household! Do yourself a favor and take out a life insurance policy just in case.
Other People Depend on Your Income
If you provide financial assistance and/or care for elderly parents or a special needs adult, then life insurance is an ideal back-up plan. No parent wants their children to die before them, but if your elderly parents are dependent on you for care and financial help, then you should do whatever it takes to ensure they’re well-taken care of even if you happen to die before them. The same goes for adult dependents who cannot live on their own due to special needs, mental health, or other concerns.
You Co-Signed for Your Kids’ Student Loans
This is one of the more surprising categories of candidates for life insurance policies: parents who co-signed their children’s student loans for college. Since both you and your kid(s) are responsible for the student loan repayments, neither of you want to be left in the position of trying to pay them back single-handedly if one co-signer dies. This means you should either purchase a life insurance policy for your college student or ask them to purchase their own policy as a condition for you agreeing to co-sign their student loans.
Parents in their 40s, 50s and 60s are so close to retirement that they don’t want to be on the hook for tens of thousands of dollars in student loans in the unlikely event that their child dies before them (not to mention having to deal with the financial pain in conjunction with the emotional pain during that difficult time). Life insurance is an ideal path to preserving financial stability for everyone involved.