Sunday, October 5, 2014

Do you really need life insurance? contributed by Tricia Zwirner, State Farm Insurance

Life insurance isn’t just for married couples with children. The need for life insurance is much broader. “Anybody who would experience a financial loss or an emotional loss after a death will need some type of life insurance,” says Marvin Feldman, president and CEO of the Life and Health Insurance Foundation for Education.

Who is it for?

Having dependents of any kind necessitates life insurance. Here are examples: 

·        Unmarried couples. Unmarried individuals may have a significant other who relies on their support. Life insurance can help provide for them.
·        Stay-at-home spouses. Life insurance isn’t just for breadwinners. It can help cover the cost of replacing the services of stay-at-home parents.
·        Single parents. These individuals are typically the sole source of support for their children. Life insurance can help provide for children financially should their parent die.
·        Singles. Single individuals could be responsible for aging parents or may have significant debt. “Life insurance helps make sure those debts are paid,” Feldman says.
·        Retirees. Insurance can help replace income from part-time work, Social Security benefits, pensions or other employer benefits. It helps spouses continue living as they’re accustomed.
·        Empty nesters. Older adults may have custody of a grandchild or provide support for other family members. Life insurance may help this care to continue.
·        Business owners. Life insurance has many benefits for business owners, such as helping protect family members from taking on a person’s professional debt, or providing funds for survivors to buy out the deceased's interest. 

What can it cover?

Beyond paying for final expenses, loved ones can put these death benefits toward:
·        Paying off debt
·        Financing an education
·        Settling estate taxes
·        Contributing to charity
·        Creating an inheritance
·        Replacing income
·        Replacing employer benefits

Are there additional benefits?

Some policies also offer living benefits. Whole policies and universal life policies accumulate value that can be tapped as retirement income or used to help cover unexpected expenses. Universal life policies also may have riders allowing chronically ill policyholders to withdraw the face amount during their lifetimes to help cover long-term care costs or to prepare loved ones financially before passing. Decide which type of policy best suits your needs.

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