Amanda Eyles, Insurance Specialist
Financial advisors have heard multiple reasons why people do not have, or say they are not interested in purchasing, life insurance. Here are six of the most popular.
1. “It is too expensive”
2. “I am strong and healthy”
3. “Why? I do not have children”
4. “It is for babies and old people”
5. “I have life insurance through my employer”
6. “Life insurance? It is on my list … you know … eventually”
So Who Needs Life Insurance?
Married—Many people mistakenly believe they don’t need life insurance until they have children. Not true. Lots of double income, married couples do not have children, so should they not have life insurance? The answer is: they may not need as much life insurance, but they need to have some. Realistically, what if your spouse died tomorrow? You will need to have enough life insurance to replace the income of your deceased spouse to pay off credit card balances, car loans and other debts, let alone cover the monthly rent, mortgage or utility bills.
Married With Kids—Most families depend on two incomes to make ends meet. That is why we suggest taking out a term life insurance policy. How much? Licensed professionals routinely recommend taking 10 times your annual take-home pay. The same question applies here as above: If you died suddenly, how would your family continue meet their financial obligations of paying rent, mortgage or daily living expenses? Could your family continue their standard of living on your spouse’s income alone? Would their plans for the future, like for college, stay intact?
Stay-At-Home Parent—Just because you don’t earn a salary doesn’t mean you don’t make important contributions to your family. You do. Childcare, transportation, cleaning, cooking and other household activities are all important tasks. The replacement value of what you do day in and day out for your family as a stay-at-home parent is too often severely underestimated.
You Have Grown Children—Just because your kids are through college and the mortgage is paid off doesn’t necessarily mean you no longer need life insurance. If you died today, your spouse will still be faced with daily living expenses. Wealth preservation or legacy planning should be a conversation you have now with your financial advisor.
Single—Most single people don’t need life insurance because no one depends on them financially, but there are exceptions. For example, some single people provide financial support for aging parents or a sibling with special needs. Others may be carrying significant debt that they wouldn’t want to pass on to family members who survive them.
With a Partner—Do you share a home and a mortgage with someone special in your life? If that person passes away and you need money, how quickly might that house sell? Not right away. With a life insurance policy, you will be able to make the mortgage payments if you decide to remain in the home or if it sits on the market for weeks and months to come.
Whether it is life, disability, long-term care or any other type of insurance, there is a sentiment that you are just throwing money away every month or six months. The point of having insurance is to give you peace of mind that you are protected, and knowing help is there when you need it.
Again, insurability is a perfect reason to consider life insurance when you’re single. If you are young, healthy and have a good family health history, your insurability is at its peak. You will be rewarded with the best rates on life insurance.
Owning life insurance is the responsible choice no matter what age you are. Please reach out to your Hefren-Tillotson advisor today, to begin the process of determining the best needs for you and your family.