Who Needs Life Insurance?

How might life insurance fit into your financial plans if...

You are married
Many families depend on two incomes to make ends meet. If you died suddenly, could your family maintain its standard of living on your spouse's income alone? Probably not. Life insurance makes sure that your plans for the future don't die when you do.

You are a single parent
As a single parent, you're the caregiver, breadwinner, cook, chauffeur, and so much more. Many single parents have no life insurance whatsoever, and many with coverage say they need more. With so much responsibility resting on your shoulders, you need to make doubly sure that you have enough life insurance to safeguard your children's financial future.

You are a work-at-home parent
Just because you don't earn a salary doesn't mean you don't make a financial contribution to your family. Childcare, transportation, cleaning, cooking, and other household activities are all important tasks, the replacement value of which is often severely underestimated. Could your spouse afford to pay someone for these services? With life insurance, your family can afford to make the choice that best preserves their quality of life.

You are a small business owner
Besides taking care of your family, life insurance can also protect your business. What would happen to your business if you, one of your fellow owners, or perhaps a key employee, died tomorrow? Life insurance can help in a number of ways. For instance, a life insurance policy can be structured to fund a "buy-sell" agreement. This would ensure that the remaining business owners have the funds to buy the company interests of a deceased owner at a previously agreed upon price. That way, the owners get the business and the beneficiaries of the deceased get the money. To protect a business in case of the death of a key employee, "key person insurance," payable to the company, provides the owners with the financial flexibility needed to either hire a replacement or work out an alternative arrangement.

You are single
Many single people don't always see the value in life insurance because, in some cases, no one depends on them financially. But there are exceptions. For instance, some single people provide financial support for aging parents or siblings. Others may be carrying significant debt that they wouldn't want to pass on to family members who survive them, (e.g., education expenses). If you're in these types of situations, you should own life insurance because you wouldn't want your loved ones to be burdened financially in the event of your premature death.