A lot of people get along just fine without life insurance benefits, and this is enough to make other people wonder why they need a policy. The answer is somewhat dependent on your circumstances - some people should make sure they are covered, while it might not be necessary for others. Generally, people with financial dependents are the ones who should consider it.
Unlike other types of policies, life insurance isn't really for you. It only pays out after you die, or in some cases, are permanently disabled. These policies aren't designed to benefit you - rather they protect your financial dependents from the sudden loss of your paycheck. Because of this, being insured is more or less important based on how much and how many people are dependent on your income.
Single-earner households are the most at-risk for poverty after the death of the breadwinner. This used to be the typical family set-up, with the father working and the mother home with the kids. This is a situation in which life insurance is very important. Generally the stay at home parent doesn't have the education, experience, or ability to make up the gap in income should the breadwinner pass away, in this situation.
Families that are just getting by on two incomes are another group that should consider a policy. In this case, one working person halves the income the family is receiving, which can be almost as catastrophic as losing the sole breadwinner. For younger people, who are generally the ones with a lot of financial dependents (kids, parents), the price of a policy is often well worth it.
Insuring your life is certainly a bit difficult to think about in some cases. But being practical and thinking about what would happen to your loved ones if you weren't there to take care of them is an important part of being financially responsible for someone. Making sure that they can pay the bills while they mourn you is the least you can do.
Some jobs come with benefits that include policies. This is worth looking into, because they can be very inexpensive. Traditionally, this is a benefit in jobs that are dangerous, such as firefighters, police officers and the military, but it can also be an option for less high-risk occupations if your company has decided to offer it.
Your projected lifespan according to actuarial tables is what companies use to decide what to charge you. Prices are cheaper for younger, healthier people because there is a lower probability that the company will need to pay out. Screening processes range from the very limited (age, gender, and perhaps smoker versus non-smoker) to the very detailed. Your life insurance benefits are paid out to the person you name on the plan.
Of course a monthly payment for something that will most likely not be used must be considered in terms of your overall finances. However, it is actually more important to have this type of coverage when you are just making ends meet, because these are the situations wherein your loved ones have the most to lose if your earning potential disappears. Remember - life insurance isn't for you, it's for your loved ones.
Unlike other types of policies, life insurance isn't really for you. It only pays out after you die, or in some cases, are permanently disabled. These policies aren't designed to benefit you - rather they protect your financial dependents from the sudden loss of your paycheck. Because of this, being insured is more or less important based on how much and how many people are dependent on your income.
Single-earner households are the most at-risk for poverty after the death of the breadwinner. This used to be the typical family set-up, with the father working and the mother home with the kids. This is a situation in which life insurance is very important. Generally the stay at home parent doesn't have the education, experience, or ability to make up the gap in income should the breadwinner pass away, in this situation.
Families that are just getting by on two incomes are another group that should consider a policy. In this case, one working person halves the income the family is receiving, which can be almost as catastrophic as losing the sole breadwinner. For younger people, who are generally the ones with a lot of financial dependents (kids, parents), the price of a policy is often well worth it.
Insuring your life is certainly a bit difficult to think about in some cases. But being practical and thinking about what would happen to your loved ones if you weren't there to take care of them is an important part of being financially responsible for someone. Making sure that they can pay the bills while they mourn you is the least you can do.
Some jobs come with benefits that include policies. This is worth looking into, because they can be very inexpensive. Traditionally, this is a benefit in jobs that are dangerous, such as firefighters, police officers and the military, but it can also be an option for less high-risk occupations if your company has decided to offer it.
Your projected lifespan according to actuarial tables is what companies use to decide what to charge you. Prices are cheaper for younger, healthier people because there is a lower probability that the company will need to pay out. Screening processes range from the very limited (age, gender, and perhaps smoker versus non-smoker) to the very detailed. Your life insurance benefits are paid out to the person you name on the plan.
Of course a monthly payment for something that will most likely not be used must be considered in terms of your overall finances. However, it is actually more important to have this type of coverage when you are just making ends meet, because these are the situations wherein your loved ones have the most to lose if your earning potential disappears. Remember - life insurance isn't for you, it's for your loved ones.
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